You may not believe the narrative or even the data, but the market is honest: it is pricing in stagflation.

McDonald's delivered a strong report card for the first quarter of 2026. Earnings per share came in at $2.83, higher than the expected $2.74; revenue reached $6.52 billion, about $50 million above consensus; global same-store sales rose 3.8%, and the U.S. saw a 3.9% increase. CEO Kempczinski said, "This quarter, McDonald's delivered," with an obvious sense of relief in his tone.

Yet, the stock price has fallen to near its 52-week low:

The closing price on May 29 was about $280, nearly 18% down from the 52-week high of $341 on March 2 and about 10% lower year-to-date. This is a business with a 46% profit margin, $7.2 billion in free cash flow, and roughly 45,400 stores globally—the business remains solid, yet the stock is falling.

If you think this is just McDonald's problem, you're mistaken. Domino’s is down about 11% this year, and around 23% over the past 52 weeks. Procter & Gamble's total return over the past 12 months is -10%. Colgate-Palmolive is at -6.8%. Yum! Brands also dropped about 6% after its Q1 report. These companies share a common feature: high dividends, aggressive buybacks, and long durations—they’re dubbed "bond proxies" by the market. The whole "bond proxy" camp is being repriced.

It’s not that one particular company has an issue, but this entire category of asset is simply being shunned in the current expected environment.