A sign for BlackRock Inc hangs above their building in New York.
Lucas Jackson | Reuters
BlackRock‘s Rick Rieder told CNBC on Wednesday investors should take advantage of the pullback in some technology stocks after they have faced pressure from rising bond yields this year.
The 10-year Treasury yield hit a new 13-month high Wednesday, briefly going above 1.67%. It began the year below 1%. The rapid rise comes as Wall Street anticipates a strong economic recovery from the coronavirus pandemic, along with some concerns about inflationary pressures.
Growth stocks, many of which are in the technology sector, are hurt by rising yields because it reduces the relative value of future earnings, causing investors to reevaluate the price per share they’re willing to pay now.
“We’re in an environment where, no doubt, you’re increasing the discount rate so if you can talk about your multiples on some of the technology companies that have been trading at very high valuations, there is some, clearly, some compression that should take place and is taking place,” Rieder said on “Squawk Box.”