The biotech sector, represented by the XBI ETF, is trading higher today, driven by better-than-expected second-quarter earnings from industry giant Novartis. The company's sales and operating income surpassed analyst estimates, providing a positive sentiment lift to the broader industry. This news reinforces an already bullish environment for biotech in 2026, which has been characterized by a significant increase in merger and acquisition (M&A) activity and strong performance from recent initial public offerings (IPOs).