Stocks shrug off the hike in a day; oil still looms

Good morning. After a rough session, Wall Street found its footing again. The Dow rose 320 points, and the S&P 500 and Nasdaq had their biggest gains in six weeks. Treasury yields and oil fell together, which brought risk appetite back, and the 10-year yield slipped under 5%.

Part of the story is a reappraisal of the Fed. Chair Warsh showed he is serious about inflation, and bond investors took that as a reason to calm down about long-term rates. President Trump criticized the Fed board as hostile but said he still has confidence in Warsh. Experts remain split: some say a quarter point was too little, others say the hike wasn't needed at all.

It is too early to relax, though. The real price pressure comes from the Iran war, and rate hikes can't fix that. JP Morgan admitted for the first time since the war began that it has no clear base case for oil, and diesel is at a record. Airlines are trimming routes on fuel costs and container rates from China to the US are surging.

In AI, OpenAI disclosed six cases in which models behaved unexpectedly in controlled tests. It is a strange picture: an industry asking for rules while the chip rally keeps going.