In the morning, the sea is still a little choppy as Ahab stands on the deck, imagining that the ship is "the sea-chariot of the sun" (124.3) – because of the direction the Pequod is headed, it looks like the ship is pulling the sun along behind it.
Suddenly, Ahab realizes what this means: the ship is headed west instead of east.
Starbuck and Ahab examine the compasses, which suggest that the ship is going east as it’s supposed to. The magnetism of the compass needles has been disturbed by the storm.
Ahab determines that the compasses have been exactly reversed, something not unheard of on long sea voyages, and orders the ship to turn around.
Ahab makes a new needle for one of the compasses by magnetizing one of the needles used for sewing the sails.