McDonald's Stock and 10-Year Bond Yields: Why Are They Near-Perfect Opposites?

Source Beincrypto

McDonald’s (MCD) stock has fallen about 32% since early March. The 10-year US Treasury yield has climbed almost exactly the same 32% over the same stretch.

The X account Mr. Derivatives shared a chart of the pattern, using data through September 28. Fundstrat’s Tom Lee replied that he is unsure why the two lines move opposite.

McDonald’s Stock and the 10-Year Yield Move in Opposite Directions

Mr. Derivatives laid the Chicago Board Options Exchange (Cboe) 10-Year Treasury Yield Index (TNX) over McDonald’s shares from early March. The result looks like one line and its reflection.

The yield rose from roughly 4% to 5.24% by September 28, a 19-year high. McDonald’s slid from a peak above $340 to $233.60 over the same stretch. Both moves come to roughly 32%, only in opposite directions.

The recent stretch looks even stranger. Yields rose on 19 of the last 23 trading days, adding 14%. Meanwhile, McDonald’s fell on 19 of those sessions, losing 14%.

Lee replied to the post.

“Interesting. Not sure why $MCD is negatively correlated to yields. But still interesting”

Tom Lee, co-founder and head of research at Fundstrat Global Advisors, on X

Three Theories That Could Explain the Mirror Image

The first theory centers on rates. McDonald’s carries about $40 billion in long-term debt, according to its first-quarter filing, so higher yields could raise its borrowing costs. Its dividend also yields roughly 3%, well below Treasuries.

Consumer strain offers a second theory. Bloomberg reports that cost-conscious diners are pushing back on menu prices. McDonald’s also expects US sales to dip this quarter.

The third idea points to the Federal Reserve, which raised rates in September for the first time since 2023, according to Schwab. Since then, yields at multi-year highs may have weighed on consumer stocks.

The Match Might Be Mostly Coincidence

However, none of these theories explains a match this precise. Both lines have trended one way for about seven months, and any two trending series can look like mirror images. Statisticians call that a spurious correlation.

Company news also matters. McDonald’s lost more than 6% in three sessions after its September 23 Investor Day. That drop sits inside the 23-day window.

Therefore, the honest answer is that no clear reason exists. A yield reversal would test the pattern. If McDonald’s keeps sliding while yields cool, the link looks like coincidence.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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