What Happened?
A number of stocks fell in the afternoon session after the Federal Reserve held its benchmark rate at 3.5%–3.75% and delivered a dot plot pointing toward a potential hike. Packaged food companies are held precisely because of their bond-like qualities: predictable earnings and steady dividends in uncertain markets.
But those qualities become less distinctive when the 2-year Treasury yield jumps 11 basis points in a single session to 4.161% and the Fed signals rates could move higher still. The late-2025 rate cuts had made dividend stocks look more attractive by widening the yield gap versus Treasuries; The dot plot closed that gap. Companies like Kraft Heinz and Conagra also carry significant acquisition-related debt, meaning rising rate expectations translate directly into higher refinancing costs.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Shelf-Stable Food company Hershey (NYSE: HSY) fell 5%. Is now the time to buy Hershey? Access our full analysis report here, it’s free.
- Shelf-Stable Food company The Marzetti Company (NASDAQ: MZTI) fell 3.4%. Is now the time to buy The Marzetti Company? Access our full analysis report here, it’s free.
- Shelf-Stable Food company Simply Good Foods (NASDAQ: SMPL) fell 3.6%. Is now the time to buy Simply Good Foods? Access our full analysis report here, it’s free.
Zooming In On Hershey (HSY)
Hershey’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 11 months ago when the stock gained 4% on the news that new economic data showed unexpected strength in U.S. consumer spending, boosting investor confidence in consumer-focused stocks.
The broader market rallied after the U.S. Census Bureau reported that retail sales rose more than expected in June, a sign of a resilient consumer. This encouraging economic picture is particularly beneficial for consumer staples companies like Hershey, as it suggests shoppers still have the capacity and willingness to spend on everyday items and treats.
The positive data helped ease investor fears about a potential recession, lifting stocks across the consumer sector. The move provided a boost for Hershey, which has faced headwinds from surging cocoa prices and has seen its earnings per share forecast for 2025 contract., Investors appeared to set aside those concerns for the day, focusing instead on the favorable macroeconomic backdrop for consumer demand.
Also, the second quarter (2025) earnings season got off to a strong start. Quarterly earnings reports released during the week exceeded Wall Street's expectations, fueling investor confidence. Around 50 S&P 500 components reported, with 88% of those exceeding analysts' expectations, FactSet data revealed.
Hershey is down 3.8% since the beginning of the year, and at $175.57 per share, it is trading 25.7% below its 52-week high of $236.28 from February 2026. Despite the year-to-date decline, investors who bought $1,000 worth of Hershey’s shares 5 years ago would now be looking at an investment worth $1,012.
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