Core Viewpoint - Market volatility has raised concerns among investors, but experts at T. Rowe Price believe that the current nervousness will lead to a better market environment by 2026 [1][3]. Market Performance - Major stock indices experienced significant declines last week, with the S&P 500 Index falling nearly 2% and the Nasdaq-100 Index dropping 3.1%. Bitcoin also saw a substantial slump of 10.3% last week, down 23% in November, and down 9.6% for the year [2]. Future Outlook - T. Rowe Price anticipates a less volatile market in 2026, driven by a benign economic environment despite current challenges such as labor market weakness and persistent inflation [3][4]. - The firm remains optimistic that the impact of Donald Trump's tariffs has been less detrimental to the economy than initially feared, which is seen as a positive sign for stocks [5]. Economic Drivers - Significant corporate spending on artificial intelligence is contributing to economic growth, helping to offset weaknesses in the housing market and manufacturing sectors [6]. - The jobs data indicates a bifurcated economy, with non-cyclical sectors like government, education, and healthcare facing stagnation or struggles [7]. Contributing Factors - Factors contributing to the positive outlook include business and personal tax cuts, substantial tax refunds in the first half of the year, increased capital spending, job growth, and reduced tariff uncertainty [8].