Hi I'm going to be setting up a new iPhone from my old iPhone but I wanted to know if I should transfer my SIM card first before I transfer all my data from old phone

When you upgrade, the new iPhones have an eSIM built-in.

The moment you sign in with your Apple ID, your new iPhone will activate and your old one will deactivate simultaneously.

From there, you will be prompted for a device-to-device wireless transfer.

Be patient because everything (settings, apps, home screen layout, all preferences) will transfer during this process.