Growth stocks have room to decline further if interest rates continue to rise, New York University finance professor Aswath Damodaran told CNBC on Tuesday,
A rapid increase in bond yields this year has put pressure on equities with high multiples. The 10-year Treasury yield, which began 2021 under 1%, was trading above 1.6% Tuesday. Some on Wall Street, notably BlackRock's Rick Rieder, believe the yield could hit 2% this year.
"In general, when rates go up, growth companies feel the pain a little more than mature companies for a simple reason: their earnings and cash flows are way out in the future, and higher rates make them less valuable," Damodaran said on "Closing Bell." "That's always been true."