The heightened market volatility due to the rising inflation, the Fed’s rate hikes, and supply chain issues have caused several healthcare stocks to slump in price. However, the healthcare industry continues to outperform the broader market, as is evident from the Health Care Select Sector SPDR’s (XLV) 13.6% year-to-date decline compared to SPDR S&P 500 Trust ETF’s (SPY) 21.1% fall. Demand for healthcare goods and services remains significantly vital.
On the other hand, President Biden’s Advanced Research Projects Agency for Health (ARPA-H) proposal for boosting U.S.’ biomedical and health research recently got authorized for eventual implementation. This plan is expected to drive advanced and cost-efficient medical research for critical illnesses in the future and should benefit the industry. Furthermore, the resurgence of covid cases has brought renewed focus on the healthcare sector. According to the CDC, cases climbed above 100,000 in May- three times more than last year.
