Biotech ETF Declined Amid Rising Interest Rates

The XBI fell 8.3% over the last 30 days as high Treasury yields put pressure on valuations across the sector.

Updated on Sept. 25, 2026 in Biotech

Isometric editorial illustration showing a laboratory beaker and pipette heads, representing market analysis of the biotech sector. — The SPDR S&P Biotech ETF declined 8.3% over the past month as rising Treasury yields pressured valuations across the research-heavy sector. AI Illustration. Upload story photo >

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Is now a good time to invest in biotech stocks despite current interest rate pressures?

The SPDR S&P Biotech ETF (XBI), which holds more than 160 companies, has declined 8.3% over the past 30 days. Despite this recent dip, the fund remains up 27% year to date.

Why it matters

Rising interest rates and Treasury yields, currently at their highest levels since 2007, have introduced significant valuation pressure for biotech firms. The sector is now bracing for a heavy cycle of clinical trial and business catalysts.

The XBI fund manages exposure across 160-plus companies to mitigate the volatility of individual stock performance. Recent performance highlights include Eton Pharmaceuticals rising 229% year to date while Harrow fell 31%.

The players

SPDR S&P Biotech ETF

An exchange-traded fund that tracks a broad index of more than 160 companies across the biotechnology sector.

TG Therapeutics

A biotechnology company focused on treatments for B-cell diseases that is tracking toward a $1 billion U.S. Briumvi exit run rate by 2026.

Cytokinetics

A biopharmaceutical firm specializing in muscle biology that develops small-molecule drugs for cardiovascular diseases.

Federal Reserve

The central banking system of the United States that sets national monetary policy and benchmark interest rates.

The details

The ETF (exchange-traded fund — a pooled investment security that tracks an index) spreads capital across a diverse set of holdings to limit the impact of individual clinical trial failures. As the Federal Reserve has increased benchmark rates to 4.00%, borrowing costs for these firms have risen, which typically suppresses the valuation of future earnings in research-heavy industries.

July 2023 marked the previous date of the last Federal Reserve hike.
Cytokinetics reported $8.9 million in wholesale sales during Q2 2026.
Projected Q3 2026 sales for MYQORZO are estimated at $18 million.
TG Therapeutics expects Phase 3 ENHANCE results on October 21-23, 2026.
Subcutaneous ublituximab Phase 3 data is expected in Q1 2027.

The Tech Race

The biotechnology sector is currently navigating valuation pressures linked to the Federal Reserve's benchmark rate of 4.00%. Firms are now relying on upcoming clinical milestones, such as TG Therapeutics' ENHANCE results, to drive individual performance independent of broader market volatility.

Investors tracking the biotech sector should monitor upcoming clinical trial results from companies like TG Therapeutics and Cytokinetics, which could shift individual stock momentum. The current interest rate environment makes these specific data-driven catalysts the primary drivers of value for the next several quarters.

The takeaway

While the XBI has seen a recent decline, the industry remains focused on a pipeline of over 40 distinct clinical catalysts. Investors should watch the Q3 2026 sales performance of MYQORZO and the October 2026 Phase 3 data releases as bellwethers for sector recovery.