A rising tide lifts all boats, but rising US sanctions could sink Russian oil tankers.

On Thursday, oil prices leaped more than 5%, the biggest single-day gain since June, a day after the United States levied new sanctions on Russia’s top two oil producers. Intended to pressure President Vladimir Putin to end the full-scale invasion of Ukraine that he ordered more than three years ago, the new measures also sparked questions about the immediate future of global oil supplies and prices.

Turn Off the Taps

The new sanctions ordered by US President Donald Trump and implemented by the Treasury are very straightforward. First, all the US assets of Rosneft and Lukoil, the two largest Russian oil producers, are frozen. Second, US companies and individuals are blocked from doing business with them. Additional sanctions may be placed on foreign-based financial institutions that work with Rosneft or Lukoil, cutting off their access to international markets. “Bye, Felisiya,” in other words.

It all comes down to a stalemate in recent negotiations with Putin to end the war in Ukraine. Trump said Wednesday that talks did not “go anywhere,” and Moscow has stuck to hard-line demands, including that Ukraine cede large chunks of its territory, which Kyiv and its European partners have balked at. Treasury Secretary Scott Bessent emphasized that the new sanctions are designed to weaken Russia’s ability to fund its invasion by targeting its most important revenue source: taxes from the oil and gas industry, which make up about a quarter of the state budget. And existing US and European sanctions on the sector have proven effective: Russia expects oil and gas tax revenues to fall 22% to $100 billion this year, according to State Duma estimates published last month. The latest round of sanctions is poised to send its biggest customers shopping elsewhere:

• Oil importers in India, which takes in 1.6 million to 1.8 million barrels of Russian crude per day, or more than a third of its oil shipments, are preparing for massive cuts to Russian imports in order to comply with US sanctions, the Mumbai-based Economic Times reported Thursday. Privately held Reliance Industries, India’s top purchaser of Russian crude, is considering halting Russian imports altogether, while state-owned Indian Oil and Hindustan Petroleum plan to cut off Rosneft and Lukoil, the paper said.
• Meanwhile, China’s state oil majors are suspending their Russian oil purchases, sources told Reuters. China procured roughly 17% of its crude imports through August from Russia, and is Moscow’s biggest customer (India is No. 2).

Shares the Wealth: Indian and Russian buyers, and possibly those in Turkey, Moscow’s third-biggest customer, will have to seek alternatives, which could disrupt supplies and push oil prices closer to $70 a barrel (international benchmark Brent crude topped $65 Thursday). Naturally, that would benefit shares in oil majors: British producers Shell and BP rose roughly 3% in London on Thursday, although US majors ExxonMobil and Chevron were more muted in New York, up 1.1% and 0.6% respectively.

A Commerce Department official denied that the agency plans to invest in several quantum-computing companies in exchange for equity, according to CNBC, but that didn’t stop the stocks’ upward climb. The Wall Street Journal reported Wednesday that the US government agency was talking with top quantum companies including IonQ, Rigetti Computing and D-Wave Quantum about awarding at least $10 million to each.

The report stoked investment in the sector, suggesting the government would throw its weight behind the next-gen technology. Quantum computers, which can solve complex problems eons faster than traditional computers, are expected to impact industries ranging from pharmaceuticals to finance.

But when this tech will start to have practical applications isn’t clear; experts have guessed anywhere from five to 20 years. Despite the blurry timeline, investors have piled into quantum stocks in 2025, pushing the top companies to market caps of $10 billion to $20 billion.

Quant Stop The Feeling

Quantum companies have made a series of breakthroughs this year. The latest: Google on Wednesday said its quantum computer produced a verifiable result 13,000 times faster than a traditional computer, which could accelerate advances in drug discovery and materials science. Microsoft and Amazon, meanwhile, have unveiled quantum chips, while IBM has shared a roadmap to developing a fault-tolerant quantum computer by 2029.

While this week has been volatile for quantum stocks, which dipped and then rose again after the Journal’s report, it’s clear investors are stoked:

• D-Wave has led the charge, with its shares rising more than 223% this year as of yesterday’s close. Meanwhile, Rigetti’s up 98% and IonQ has jumped 38% this year. Smaller players that are also said to be in talks for federal funding, including Quantum Computing, have posted year-to-date gains, too.
• Microsoft, IBM and other companies, along with governments like China’s, have poured billions into quantum’s potential. Investors juiced quantum-focused startups with about $2 billion last year, McKinsey found. The industry’s expected to make as much as $100 billion in revenue in the next decade. But it has a long way to go: Quantum companies garnered less than $750 million last year.

Land of the Funds: The Trump admin has been on a funding spree in the president’s second term, securing sizable stakes in five publicly traded companies, including rare earths processor MP Materials and chipmaker Intel. Though the Trump admin denied it’s in talks to fund quantum companies, it’s definitely keeping a close eye on the tech. Not only does quantum computing have the potential to juice the economy in a major way, but it could also pose a national security threat, possessing the power to crack encryption and access sensitive data.

That thing inflating before us like the Ghostbusters Stay Puft Marshmallow Man? Now, we know it’s not a bubble.

Nearly half of professional investors surveyed in Barron’s latest Big Money poll, published Thursday, said they were optimistic about the market’s potential over the next 12 months. It’s a major reversal from the pervasive pessimism that took hold earlier this year, and historically speaking, it looks pretty accurate, based on the length of past bull markets.

Moonwalking From The Edge

The arrival of “Liberation Day” tariffs, which would have amounted to the largest US tax increase in at least a few generations, had they been permanent, positively spooked investors when they landed in April. Just 28% of Big Money respondents reported market optimism in a poll published in early May, marking the lowest reading in the Barron’s survey since 1997.

The S&P 500, however, has climbed 35% since its April low, as trade-war treaties provided more clarity, consumer spending remained robust, and the AI hype train chugged along. Despite bubble talk, just 19% of investors told Barron’s they’re bearish about market conditions, down from 32% in the spring, while 34% say they are neutral and 47% report optimism.

Optimism aside, survey respondents gave curious onlookers plenty to chew on:

• About 67% say they disapprove of the White House’s tariff regime, while 57% approve of the Federal Reserve’s handling of interest rates, down from 70% in the spring. Some 63% see inflation climbing to 3% overall in 2025, while a plurality (31%) see GDP growing 2% this year, and another plurality (25%) see growth narrowing to just 1.5% next year.
• Tesla was cited as the most overvalued stock by 21% of survey respondents, who were also somewhat mixed on Nvidia: 13% of respondents called the semiconductor king the market’s most overvalued stock, while 5% called it their “favorite” stock. Meanwhile, a little over half (56%) say they are professionally beating the S&P 500, while 58% say they are personally beating the index.

History Lesson: While bubble fears are real, there’s plenty of reason to believe the market has room to run, especially as the “Other 493” members of the S&P 500 close the earnings growth gap with the market-leading Magnificent Seven. This particular bull run turned three years old earlier this month, with the S&P 500 rising roughly 90% in that span. The 14 bull markets since 1932 saw an average gain of 170%, and lasted about five years, Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, recently told Reuters. Optimistic survey respondents may well be just good students of history.