diff --git a/src/exec.cpp b/src/exec.cpp
index e9f1818ad..83adbb60c 100644
--- a/src/exec.cpp
+++ b/src/exec.cpp
@@ -745,8 +745,8 @@ static bool exec_block_or_func_process(parser_t &parser, const std::shared_ptr<j
     return true;
 }
 
-/// Executes a process \p in job \j, using the pipes \p pipes (which may have invalid fds if this is
-/// the first or last process).
+/// Executes a process \p \p in \p job, using the pipes \p pipes (which may have invalid fds if this
+/// is the first or last process).
 /// \p deferred_pipes represents the pipes from our deferred process; if set ensure they get closed
 /// in any child. If \p is_deferred_run is true, then this is a deferred run; this affects how
 /// certain buffering works. \returns true on success, false on exec error.
@@ -800,8 +800,18 @@ static bool exec_process_in_job(parser_t &parser, process_t *p, const std::share
     // This may fail.
     if (!process_net_io_chain.append_from_specs(p->redirection_specs(),
                                                 parser.vars().get_pwd_slash())) {
-        // Error.
-        return false;
+        // If the redirection to a file failed, append_from_specs closes the corresponding handle
+        // allowing us to recover from failure mid-way through execution of a piped job to e.g.
+        // recover from loss of terminal control, etc.
+
+        // It is unsafe to abort execution in the middle of a multi-command job as we might end up
+        // trying to resume execution without control of the terminal.
+        if (p->is_first_in_job) {
+            // It's OK to abort here
+            return false;
+        }
+        // Otherwise, just rely on the closed fd to take care of things. It's also probably more
+        // semantically correct!
     }
 
     // Read pipe goes last.
diff --git a/src/io.cpp b/src/io.cpp
index 081354b1b..dd71e6714 100644
--- a/src/io.cpp
+++ b/src/io.cpp
@@ -253,6 +253,10 @@ bool io_chain_t::append_from_specs(const redirection_spec_list_t &specs, const w
                         FLOGF(warning, FILE_ERROR, spec.target.c_str());
                         if (should_flog(warning)) wperror(L"open");
                     }
+                    // If opening a file fails, insert a closed FD instead of the file redirection
+                    // and return false. This lets execution potentially recover and at least gives
+                    // the shell a chance to gracefully regain control of the shell (see #7038).
+                    this->push_back(make_unique<io_close_t>(spec.fd));
                     return false;
                 }
                 this->push_back(std::make_shared<io_file_t>(spec.fd, std::move(file)));
diff --git a/src/io.h b/src/io.h
index 4eab047cb..bb9f3e9e8 100644
--- a/src/io.h
+++ b/src/io.h
@@ -216,7 +216,9 @@ class io_file_t : public io_data_t {
 
     io_file_t(int fd, autoclose_fd_t file)
         : io_data_t(io_mode_t::file, fd, file.fd()), file_fd_(std::move(file)) {
-        assert(file_fd_.valid() && "File is not valid");
+        // Invalid file redirections are replaced with a closed fd, so the following
+        // assertion isn't guaranteed to pass:
+        // assert(file_fd_.valid() && "File is not valid");
     }
 
     ~io_file_t() override;