McDonald's Tumbles as Treasury Yields Soar

McDonald's stock (MCD) has been inversely correlated with the 10-year U.S. Treasury yield (US10Y) over the past seven months, a trend that has continued to worsen.

The yield on US10Y has climbed 32% since early March, while McDonald's MCD stock has dropped by an identical amount during the same timeframe.

This correlation is not surprising given the Federal Reserve's interest-rate hiking cycle and persistent inflation, which puts pressure on dividend-paying stocks like McDonald's.

The company's dividend yield of 3.3% trails behind the US10Y's around 5.2%, making its payout less attractive to income investors as yields surge.