Tim Cook is stepping down. No one is shocked. And that’s a good example of how his critics always underestimated him.

Good morning. On Fortune’s radar today:

- Tim Cook’s critics always underestimated him.

- Markets: So far, so good.

- Fed chair nominee Kevin Warsh’s $7 trillion plan for the bond markets.

- Trump hints Iran war could last longer than estimated.

- Quantum computing might be further away than you think.

- Countries of the world ranked by “hopefulness.”

THE MARKETS

All is calm

Oil is at $95 per barrel—pretty much where it was yesterday. S&P 500 futures ticked up 0.18% this morning prior to the open in New York. The index closed down 0.24% yesterday, at 7,109. Asian markets closed solidly up and Europe was flat in early trading.

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The S&P is up nearly 4% year-to-date, despite the war, and remains a smidge below its all-time high. Why?

- Because companies keep beating expectations. In the first week of Q1 earnings calls, 49 companies reported results and 76% of them beat earnings estimates, according to Bank of America’s Savita Subramanian.

- Because the U.S. economy is isolated from downside risk. “We respect the ‘wisdom of the crowd’ and appreciate that last year, markets ultimately rose more than 16% on 12% earnings growth. In fact, with the U.S. economy no longer as sensitive to oil prices, consumer sentiment and the level of rates, 2026 could be a repeat,” Morgan Stanley’s Lisa Shalett told clients in a note seen by Fortune.

ONE BIG THING

Tim Cook is stepping down. His critics owe him an apology.

So long, and thanks for all the phones. Apple disclosed that Tim Cook will step down as CEO in September in favor of John Ternus, the company’s 51-year-old senior vice president of hardware engineering. Literally no one was surprised by this move and Apple’s stock barely budged on the news. The company has, shall we say, been failing to deny that Ternus was Cook’s heir since last year.

- This is exactly what you want a good CEO succession to look like: A smooth delivery into a safe pair of hands.

The incrementalist. Cook was long dogged by unfair comparisons to Apple’s founder, Steve Jobs. Jobs was the visionary who gave us the iPhone, the iPod, and the iPad. Cook was dismissed as “the operations guy,” an incrementalist who failed to introduce a revolutionary new hardware product. (Although he did launch the Apple Watch and AirPods.)

Shareholders have precisely nothing to complain about. The above view is a complete misunderstanding of Cook’s achievements. When he took over from the late Jobs, Apple’s market cap was just $349 billion. It is $4 trillion today. In 2011, Apple’s “services” revenue (music, content, apps, etc.) was roughly $2.8 billion per quarter. In the most recent quarter, it was $30 billion—a sum that would make that segment of Apple’s business one of the biggest standalone software companies on the planet. With $109 billion in annual services revenue, Apple's services segment generates more revenue in a single quarter than OpenAI generates in an entire year.

And let’s not forget that the iPhone now holds a majority market share in the U.S.—a position that, at the beginning of Cook’s reign, was regarded as unthinkable, given iPhone’s higher price compared with its then-ubiquitous Android competitors.

Incrementalism is underrated, in other words. “The operations guy” took Apple from a minority market position in devices to dominate consumer computing today. Are you reading this on a ThinkPad? Almost certainly not. Few who use a MacBook ever return to Windows. And the reason for that is precisely because Apple’s products go through revolutions only rarely. You are reading this on your iPhone or MacBook because those devices are solid, reliable, and they just work.

That was Cook’s whole vibe. Low drama, incremental improvement. You can list “Tim Cook controversies” on the fingers of one hand. No one’s workday was ever overturned by a spicy Cook tweet.

- The takeaway: Ternus has big, quiet shoes to fill.

- Meet the 51-year-old former swimming champ who will succeed Tim Cook as Apple CEO - Dave Smith

KEVIN WARSH

Warsh walks the tightrope: Independent Fed hawk or Trump's rate-cutter?

Kevin Warsh will appear in front of the Senate today at 10 a.m. local time to answer questions about how politically independent he is willing to be from President Trump, who wants him to lower interest rates. He is likely to insist that he will not be swayed by the White House, according to Fortune’s Eleanor Pringle.

Warsh has telegraphed that he wants to reduce the Fed’s balance sheet by selling off the $7 trillion in bonds it holds. That is likely to steepen the yield curve (meaning that short-term interest rates could be relatively lower while long-term rates would be higher), according to ING’s Chris Turner:

- “The consensus view in markets is that Warsh will be dovish on the policy rate and hawkish on the Fed's balance sheet. The balance sheet discussion could get a bit technical in the form of the choice of reduction (roll-offs or active sales), which securit