Can McDonald’s Q2 Earnings Reignite Momentum?

McDonald’s stock (MCD.US), up around 4% in 2025, has experienced significant volatility throughout the year, reflecting both macroeconomic pressures and company-specific developments. As the fast-food giant prepares to release its financial report for the second quarter of 2025, all eyes are on how these results will shape its market trajectory. What key metrics should investors watch? What are analysts expecting? And how might these figures impact MCD’s stock moving forward? Let’s take a closer look:

Starting the year near its lows around $276 at the beginning of 2025, the MCD stock saw a sustained upward move in early Q1, pushing through the Ichimoku Cloud resistance—a bullish sign—before entering a prolonged period of sideways consolidation between roughly $296 and $318. This period was characterized by a tug-of-war between bulls and bears, as seen in repeated tests of both support and resistance levels without a clear breakout.

Notably, at the beginning of June, the share price dipped below the Ichimoku Cloud, signaling a temporary shift toward bearish momentum. However, this move failed to gain traction, and buyers soon regained control, lifting the price back into the cloud by mid-July and setting up the current test of resistance.

The Ichimoku Cloud analysis reveals that price action in recent months has often oscillated around the Kijun-sen and Tenkan-sen lines, suggesting indecision and a lack of strong directional momentum. The cloud itself has narrowed over time, reflecting this reduced volatility and pointing to a critical juncture where a breakout could be imminent. The current price of $302.80 is just below a significant resistance at around $304, which has capped gains multiple times since June. The price is also now testing the upper edge of the cloud, which, if broken decisively, could signal the start of a new bullish phase. Conversely, a failure at this level could trigger renewed selling pressure.

RSI stands at 56, indicating that the stock is in neutral territory but leaning slightly toward bullish momentum. This mid-range RSI, combined with the upward slope in the accumulation/distribution line, suggests that while buying interest has been increasing, it has not yet reached an overbought condition. Volume trends further support this narrative: the Accumulation/Distribution (A/D) indicator has been climbing steadily, indicating that, despite choppy price action, there has been underlying accumulation throughout the year, which could provide fuel for a potential upward breakout if positive catalysts emerge.

On Wednesday, McDonald’s financial release is likely to be a pivotal event for its stock price. A strong earnings beat, particularly on comparable sales growth or margin improvement, could provide the spark needed for the stock to break out of its current range and retest higher levels near $308 or beyond. On the other hand, weaker-than-expected results or cautious forward guidance could reinforce the current resistance and drive the stock back toward the lower end of the recent trading range, possibly down to support near $296 or even $290.

Investors and traders will be watching closely for any commentary on consumer spending trends, input cost pressures, and global same-store sales—key metrics that could influence sentiment and dictate the stock’s next move.

What Happened in Q1 2025?

In the first quarter of 2025, McDonald’s faced a challenging operating environment, particularly in key markets like the United States where consumer sentiment weakened notably. Amid economic uncertainty and a tightening in household budgets, McDonald’s core customer base—largely composed of low- and middle-income consumers—began to pull back on discretionary spending, affecting traffic and sales.

This was reflected starkly in the company’s quarterly results: U.S. same-store sales fell 3.6%, marking the worst decline in its domestic market since the pandemic-induced plunge of 8.7% in Q2 2020. The downturn was partly driven by bad weather early in the year, but the broader issue was a more cautious and price-sensitive consumer, hesitant in the face of economic pressures, including the recent implementation of broad tariffs by President Donald Trump, which have contributed to growing pricing concerns.

The weakness in consumer demand, particularly among lower-income segments, weighed on McDonald’s, whose business model relies on high-volume, value-driven sales. The company’s stock price reflected this uncertainty, with increased selling pressure coinciding with the disappointing earnings.

In response to these challenges, McDonald’s management moved quickly to stem the decline and reposition the brand for a recovery. CFO Ian Borden stated in February that Q1 would likely represent the low point for the year in terms of same-store sales, hinting at stronger performance in the quarters to follow. Part of McDonald’s strategy has been to lean into affordability and menu innovation, aiming to reignite consumer interest and drive traffic back to restaurants. The reintroduction of the Snack Wrap—long requested by customers and discontinued since 2016—formed the centerpiece of this push. Offering a combination of value and nostalgia, the Snack Wrap is part of a broader value menu strategy aimed at winning back price-sensitive customers.

This strategic shift has caught the attention of Wall Street. Goldman Sachs recently upgraded McDonald’s stock to a Buy, citing expectations that new product launches and refreshed marketing initiatives will help the fast-food giant reclaim market share, even as the broader restaurant industry grapples with the pressures of slowing consumer spending. UBS echoed this sentiment, highlighting the potential for snack wraps and other menu innovations to meaningfully lift sales in the second half of the year.

Despite the rough start to 2025, McDonald’s maintained its full-year outlook. The company plans to open 2,200 new locations globally and invest between $3 billion and $3.2 billion in capital expenditures, with net restaurant openings expected to contribute just over 2% to systemwide sales growth. This long-term commitment suggests confidence in its ability to recover and expand, even amid short-term headwinds.

What Should Traders Expect for Q2 2025?

As McDonald’s prepares to report its next earnings, traders should pay close attention to whether same-store sales in the U.S. have stabilized or shown signs of recovery. Any indication that menu innovations are boosting traffic would likely be seen as a positive catalyst for the stock, potentially reversing the negative sentiment that followed Q1 results. Moreover, guidance updates regarding the impact of tariffs, consumer demand trends, and margin management will be key in shaping the market’s expectations for the remainder of 2025.