Healthcare Stocks Face 2 Years of Gridlock as XLV Holds 32% Gain Since 2025
Updated
Updated · CNBC · Nov 7
Healthcare Stocks Face 2 Years of Gridlock as XLV Holds 32% Gain Since 2025
1 articles · Updated · CNBC · Nov 7
Summary
Mizuho's Jared Holz said healthcare stocks may struggle to build momentum over the next couple of years as Democrats prepare to take over Congress, leaving investors to be selective rather than broadly bullish.
Gridlock is the main risk: Holz said he sees little chance that recent healthcare regulation will be overturned soon, limiting near-term catalysts for much of the sector.
Pharma looks especially stretched — trading more expensively than tech for the first time in 20 years — while medtech and some medical-device names near multi-year lows look more attractive if policy shifts eventually come.
XLV jumped 3% the day after Election Day but ended the week roughly flat after Thursday's broader sell-off; the ETF is still up about 32% since Trump took office, nearly 9 percentage points ahead of the S&P 500.
A bigger sector tailwind may not arrive until 2028, Holz said, if a Democrat wins the White House and the party also keeps both chambers of Congress, creating room to roll back Trump-era strategies.