Good morning. The U.S. stepped up enforcement of sanctions on Russian energy, targeting upstart trading companies that have kept a gusher of oil income flowing to the Kremlin.

• What was sanctioned? The Treasury Department imposed blocking sanctions Wednesday on three trading firms that have emerged as players in the Russian petroleum market since the 2022 invasion of Ukraine. Treasury also sanctioned a tanker company owned by Moscow and tightened the requirements on Western companies involved in the Russian oil market.
   
• What's does it mean? The move is meant to shore up a novel sanctions regime that has struggled to reduce Russia’s revenue from oil sales. Deputy Treasury Secretary Wally Adeyemo said the measures would hurt the Russian war chest while maintaining stability in global energy markets.
   
• Background: A price cap imposed by the U.S. and its allies a year ago seemed at first to succeed in its objectives, to keep Moscow’s oil on the market but reduce profits from each barrel. In recent months, however, Russian crude and fuel have mostly traded above the caps and the Kremlin’s coffers have bulged with money from the sales.

Rite Aid banned from using AI facial recognition in FTC settlement.

Rite Aid has been banned from using facial-recognition technology for surveillance purposes for five years as part of a settlement with the Federal Trade Commission.

The bankrupt retailer on Tuesday settled charges by the FTC that it had failed to put in place safeguards to prevent harm to consumers after it rolled out facial recognition in hundreds of stores.

• The Financial Accounting Standards Board declined to consider any changes to how companies account for held-to-maturity securities, a debate revived in the wake of the failures this spring of banks with significant related unrealized losses.
   
• The Federal Trade Commission on Wednesday proposed new limits to protect children from what it says are tech companies’ increasingly invasive surveillance tactics.
   
• A conservative appeals court formally killed the Securities and Exchange Commission’s plan to provide investors with more information about public companies’ stock buybacks, saying the regulator failed to conduct a proper cost-benefit analysis.
   
• One of the country’s most influential courts has asked the nation’s top securities regulator for its views on an uncomfortable subject: whether audit reports by outside accounting firms actually matter. The court already ruled that, at least in one case, they didn’t.
   
• The U.K. plans to remove a key obstacle for companies pursuing big deals, in the latest bid to halt a trend of corporations moving their listings to the U.S.
   
• Wells Fargo employees are forming the first union inside a major U.S. lender since the dawn of the modern megabank.
   
• Toyota Motor is recalling 1 million vehicles from several Toyota and Lexus models in the U.S., most of them hybrid vehicles, to inspect sensors related to the airbag system.

Powell’s pivot sows confusion over when and how fast Fed will cut.

Federal Reserve Chair Jerome Powell was asked at a recent gathering what he does for fun. He paused, then grinned.

“For me, a really big party—this is as fun as it gets—is a really good inflation report,” he said to laughter at Spelman College in Atlanta earlier this month.

Powell is finally getting what he wanted: A meaningful decline in inflation. But that is creating a familiar headache by making it harder for Fed officials, who want to keep their options open, to dissuade investors that rate cuts are imminent.

• Home Sales Ticked Up in November After 5 Months of Declines

Houthi rebels vow to retaliate as U.S.-led force deploys for Middle East.

As a U.S.-led multinational task force steamed toward the Middle East to protect one of the world’s vital shipping lanes, the Houthi rebels vowed to retaliate if attacked.

Market reaction. Yet despite the rising tensions in the Red Sea on Wednesday, traders reacted with relative calm, even as shipping companies diverted more cargoes to alternate routes. While the threat of more severe disruption persists, the response of energy markets has been muted compared with dramatic moves in prices sparked by some other past outbreaks of violence in the Middle East.

• Hamas Starts Planning for End of Gaza War
• Hamas Rejection Sours Israeli Bid to Revive Hostage Talks
• Gaza Telecom Blackouts Add to Growing Aid Crisis

• A newer Omicron subvariant is gaining speed, contributing to rising Covid-19 infections and hospitalizations in the U.S. ahead of the winter holidays.
   
• U.S. crude oil and gasoline inventories rose last week as refineries increased their capacity use and U.S. crude output reached a record level, according to data released Wednesday by the U.S. Energy Information Administration.
   
• To placate a war-weary population, Russia has doled out billions of dollars of cheap loans for its citizens to buy new homes. That money is now creating an economic headache that few predicted: a fast-building housing bubble.

• The Biden administration is discussing raising tariffs on some Chinese goods, including electric vehicles, in an attempt to bolster the U.S. clean-energy industry against cheaper Chinese exports, people familiar with the matter said.
   
• Donald Trump’s efforts to stay in power after losing the White House are forcing judges all the way up to the Supreme Court to confront obscure legal questions that long seemed largely academic but now carry big consequences.
   
• Venezuela turned over to the U.S. a man at the center of a Navy bribery scandal and released 10 detained Americans in a prisoner exchange in which President Biden granted clemency to a prominent moneyman for President Nicolás Maduro.
   
• Warner Bros. Discovery Chief Executive David Zaslav met Paramount CEO Bob Bakish this week and discussed a possible merger between the media giants, people familiar with the matter said.
   
• A convicted iPhone thief explains how a vulnerability in Apple’s software got him fast cash—and then a stint in a high-security prison.
   
• The U.S. is looking for the “right way” to work with Russia for the return of Wall Street Journal reporter Evan Gershkovich, and another American held in Russia, Paul Whelan, Secretary of State Antony Blinken said Wednesday.

Follow us on X at @WSJRisk. Follow Risk & Compliance editor David Smagalla @DSmagalla_DJ and reporters Mengqi Sun @_MengqiSun, Dylan Tokar @dgtokar and Richard Vanderford @VanderfordRich.

You can reach us by replying to any newsletter, or email David at david.smagalla@wsj.com.