US Consumers Shun McDonald's Amid Rising Cash Costs

McDonald's stock has been inversely correlated with the 10-year Treasury yield this year, but beneath the surface lies a more nuanced story. As yields rose above 5%, McDonald's stock price slid from over $340 to around $234.

The company's traffic has declined year-over-year in every complete month since March, and its second-quarter US comparable sales rose just 0.8%, below expectations.

McDonald's attempted to boost sales with cheaper offers, but even its under-$3 menu and $4 breakfast deal failed to generate the desired traffic. In contrast, Chili's recent 3 For Me deal from $10.99 attracted stronger interest.

This trend suggests that US consumers are responding to tightening cash conditions by being more discerning about their dining choices, prioritizing perceived value over price.