Impact of High Gas Prices on U.S. Stocks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 12 2026
0mins
Source: Fool
- McDonald's Sales Growth Weakens: Although McDonald's (MCD) reported a 3.8% growth in global same-store sales last quarter, this growth was primarily driven by lower-priced menu items, reflecting the reality of tight consumer budgets, with the CEO warning that the economic situation may worsen, indicating cracks in the company's market appeal.
- Dollar General Faces Spending Stagnation: Dollar General (DG) has underperformed expectations, as its low-price strategy attracts some consumers, but many low-income customers have stopped spending amid economic tightening, leading to only a 2.2% sales increase in 2023 and stagnation in same-store sales, highlighting the vulnerability of its business model.
- JetBlue Airways Operating Losses Widen: JetBlue Airways (JBLU) saw a 5% increase in total revenue in the first quarter, yet its operating loss widened by 28.5% to $224 million due to rising fuel costs, and with no fuel price hedging in place, future losses are likely to increase if oil prices remain high.
- Budget Pressure on Low-Income Households: High gas prices are placing severe budgetary strain on low-income households in the U.S., forcing them to alter their spending habits, which could lead to a decline in overall consumer spending, negatively impacting companies reliant on consumer expenditure and exacerbating the risk of economic slowdown.
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Analyst Views on MCD
Wall Street analysts forecast MCD stock price to rise
23 Analyst Rating
12 Buy
11 Hold
0 Sell
Moderate Buy
Current: 277.970
Low
300.00
Averages
337.63
High
375.00
Current: 277.970
Low
300.00
Averages
337.63
High
375.00
About MCD
McDonald's Corporation is a global foodservice retailer. Its segment includes U.S., International Operated Markets, and International Developmental Licensed Markets & Corporate. The U.S. segment is its largest market and is 95% franchised. The International Operated Markets segment comprises markets or countries in which it operates and franchises restaurants, including Australia, Canada, France, Germany, Italy, Poland, Spain, and the United Kingdom. This segment is 89% franchised. The International Developmental Licensed Markets & Corporate segment comprises development licensee and affiliate markets, including equity method investments in China and Japan. This segment is 99% franchised. Its menu features hamburgers and cheeseburgers, the Big Mac, the Quarter Pounder with Cheese, the Filet-O-Fish, and several chicken sandwiches, such as the McChicken and McCrispy as well as Chicken McNuggets, Fries, shakes, sundaes, cookies, soft drinks, coffee, and other beverages.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Iran War Drives Nearly $450 Increase in U.S. Household Energy Costs
- Increased Household Energy Costs: Moody's analysis reveals that the Iran War has led to an average increase of $447.19 in energy costs per U.S. household, cumulatively costing nearly $60 billion, highlighting the escalating economic strain on consumers.
- Surging Fuel Prices: Gasoline prices have surged over 47% since March, reaching approximately $4.39 per gallon, significantly increasing household fuel expenses, particularly impacting lower-income households that allocate a larger portion of their budgets to energy.
- Changing Spending Patterns: While consumer spending rose by 0.5% from March to April, personal income growth remained flat, and the personal savings rate fell to 2.6%, indicating that households are increasingly relying on credit and savings to sustain their spending habits.
- Future Economic Risks: Moody's chief economist warns that if the war continues, consumers will have to adopt more cautious spending behaviors, which could further threaten the already soft economic growth trajectory.
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Rising Energy Costs Impact Consumer Spending
- Increased Household Spending: Since the onset of the Iran War, the average American household has spent an additional $447.19 on energy costs, cumulatively costing nearly $60 billion, indicating heightened financial pressure on consumers that may lead to more cautious spending and impact economic growth.
- Surging Fuel Prices: Gasoline prices have surged over 47% since March, now averaging $4.39 per gallon, while diesel has risen to $5.52 per gallon, resulting in over $20 billion in additional consumer expenses, further straining household budgets.
- Declining Consumer Confidence: Although consumer spending rose by 0.5% from March to April, stagnant income growth and a personal savings rate that fell to 2.6% suggest that consumers are increasingly relying on credit and savings to maintain spending levels amid inflationary pressures.
- Pessimistic Future Outlook: Goldman Sachs anticipates that rising energy prices will continue to erode consumer purchasing power, particularly affecting lower-income households, which may lead to a further contraction in spending patterns and increase the risk of economic slowdown.
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- Stock Decline: McDonald's shares have dropped from $341 on February 27 to $278, reflecting a year-to-date decline of approximately 9%, with an 18% plunge since the onset of the Iran war, indicating market concerns over economic uncertainty.
- Strong Earnings Report: In Q1 2026, McDonald's reported a 9% revenue increase to $6.5 billion and a 6% rise in net income, with earnings per share reaching $2.78, surpassing estimates and demonstrating resilience amid challenges.
- Rising Cost Pressures: Despite revenue growth, U.S. store margins have compressed to
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Iran War Drives Nearly $450 Increase in U.S. Household Energy Costs
- Increased Household Energy Costs: Moody's analysis reveals that the Iran War has led to an average increase of $447.19 in energy costs per U.S. household, cumulatively costing nearly $60 billion, highlighting the escalating economic strain on consumers.
- Surging Fuel Prices: Gasoline prices have surged over 47% since March, reaching approximately $4.39 per gallon, significantly increasing household fuel expenses, particularly impacting lower-income households that allocate a larger portion of their budgets to energy.
- Changing Spending Patterns: While consumer spending rose by 0.5% from March to April, personal income growth remained flat, and the personal savings rate fell to 2.6%, indicating that households are increasingly relying on credit and savings to sustain their spending habits.
- Future Economic Risks: Moody's chief economist warns that if the war continues, consumers will have to adopt more cautious spending behaviors, which could further threaten the already soft economic growth trajectory.
See More
Rising Energy Costs Impact Consumer Spending
- Increased Household Spending: Since the onset of the Iran War, the average American household has spent an additional $447.19 on energy costs, cumulatively costing nearly $60 billion, indicating heightened financial pressure on consumers that may lead to more cautious spending and impact economic growth.
- Surging Fuel Prices: Gasoline prices have surged over 47% since March, now averaging $4.39 per gallon, while diesel has risen to $5.52 per gallon, resulting in over $20 billion in additional consumer expenses, further straining household budgets.
- Declining Consumer Confidence: Although consumer spending rose by 0.5% from March to April, stagnant income growth and a personal savings rate that fell to 2.6% suggest that consumers are increasingly relying on credit and savings to maintain spending levels amid inflationary pressures.
- Pessimistic Future Outlook: Goldman Sachs anticipates that rising energy prices will continue to erode consumer purchasing power, particularly affecting lower-income households, which may lead to a further contraction in spending patterns and increase the risk of economic slowdown.
See More
Exceptional Stock Portfolio for Long-Term Wealth Growth
- Portfolio Potential: This portfolio of exceptional stocks is believed to have significant long-term appreciation potential, which could lead to substantial wealth growth for shareholders, reflecting market confidence in these stocks.
- Market Performance Analysis: The stock prices as of the afternoon of May 25, 2026, indicate strong performance in the market, suggesting that investors are optimistic about their future prospects.
- Video Release Timing: The video was published on May 27, 2026, aimed at conveying the investment value of these stocks to investors, further driving market attention towards them.
- Shareholder Wealth Growth: By investing in these exceptional stocks, shareholders are expected to achieve significant wealth growth in the future, highlighting the importance of a long-term investment strategy.
See More
Investment Opportunities in High-Potential Stocks
- Long-Term Wealth Growth Potential: The portfolio of exceptional stocks is believed to significantly increase shareholder wealth over the long term, especially against the backdrop of rapid advancements in technology, offering investors substantial returns.
- AI and Indispensable Monopoly: A company referred to as an 'Indispensable Monopoly' provides critical technology needed by Nvidia and Intel, highlighting its importance in the market and potential growth space, which could become a future investment hotspot.
- Double Down Recommendation Strategy: The analyst team has issued 'Double Down' stock recommendations targeting companies poised for an upswing, emphasizing the importance of seizing investment opportunities amid market volatility and encouraging investors to enter at the right time.
- Market Timing Advantage: Now is the best time for investors to join Stock Advisor to access recommendations for three high-potential stocks, leveraging market opportunities for wealth enhancement and avoiding missed chances.
See More
Three Quality Dividend Stocks to Invest In
- Real Estate Investment Trust: Realty Income, a retail-focused REIT, offers a current dividend yield of 5.2%, supported by stable rental income, and while its stock has dropped over 8% due to rising interest rates, long-term holding can yield compounding benefits.
- Food and Beverage Giant: PepsiCo, a 'Dividend King' with 50 consecutive years of dividend increases, currently has a 3.8% dividend yield; despite facing challenges from reduced consumer spending, its organic sales grew 2.6% year-over-year in 2026, with net revenue up 8.5%, showcasing strong market adaptability.
- Fast Food Leader: McDonald's, with over 45,000 locations, is on the verge of becoming a 'Dividend King' with a 2.6% dividend yield; despite a stock price decline due to industry weakness, analysts project annualized earnings growth of 7% to 8% over the next three to five years, making its current valuation of 23 times earnings attractive for investors.
- Investment Timing: All three companies are available for under $500, making them suitable for investors seeking stable dividend income; despite economic challenges, their strong brands and market positions present a wise choice for capital allocation.
See More
McDonald's Stock Declines Amid Iran War Impact
- Stock Decline: McDonald's shares have dropped from $341 on February 27 to $278, reflecting a year-to-date decline of approximately 9%, with an 18% plunge since the onset of the Iran war, indicating market concerns over economic uncertainty.
- Strong Earnings Report: In Q1 2026, McDonald's reported a 9% revenue increase to $6.5 billion and a 6% rise in net income, with earnings per share reaching $2.78, surpassing estimates and demonstrating resilience amid challenges.
- Rising Cost Pressures: Despite revenue growth, U.S. store margins have compressed to
See More
