CNBC Daily Open: AI rally defies bond market rout

The S&P 500 closed above 7,800 for the first time, pushing markets to fresh record highs even as the bond market warns about fiscal constraints. The rally is driven almost entirely by AI-linked stocks, with major chipmakers like AMD and Marvell Technology leading as Treasury yields pull back from recent highs but stay elevated. Investors are now waiting for Federal Reserve minutes from September, when the Fed delivered its first rate hike since 2023 despite political pressure. CME FedWatch shows a 20.5% chance of at least a 25-basis-point hike in October, versus 84.5% for December. In parallel, the Reserve Bank of India raised rates for the first time since 2023, while oil moved higher on Middle East disruptions.