Biotech Sector Surges as SPDR S&P Biotech ETF (XBI) Hits $97, Rises Nearly 10% in a Week Amid Rate Cut Prospects

The biotech sector, represented by the SPDR S&P Biotech ETF (XBI), is experiencing a significant rally. The ETF has risen nearly 10% in a week, reaching $97, and is up almost 2% recently, marking its highest point since March. This surge is attributed to a lower Consumer Price Index (CPI) print, which has increased the likelihood of a rate cut in September. The favorable environment for biotech stocks is further bolstered by the sector's underperformance earlier in the year, making it ripe for acquisitions and selective stock picking. Despite the positive outlook, investors are advised to conduct thorough due diligence when selecting biotech stocks. XBI previously hit $203 in February, and has risen from 83 to almost 100 in 2.5 months.