Shares of fast food chain El Pollo Loco (NASDAQ:LOCO) fell 2.9% in the morning session after concerns arose that a widening conflict in the Middle East could harm the global economy and dampen consumer spending, as Trump warned the crisis might persist for up to a month.

A worldwide stock sell-off hit Wall Street, with the Dow Jones Industrial Average falling over 1,000 points. The consumer discretionary sector was particularly hard-hit, dropping over 3%. Investors are increasingly worried that the conflict could lead to a sustained rise in oil and energy prices, fueling inflation. This comes as many households are already navigating elevated prices and economic uncertainty. Higher costs for essentials could further squeeze budgets, potentially weakening demand for non-essential goods and services, which directly impacts companies in the consumer discretionary space. The conflict threatens to disrupt supply chains and increase freight costs, adding further pressure on these businesses.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy El Pollo Loco? Access our full analysis report here, it’s free.

El Pollo Loco’s shares are not very volatile and have only had 7 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 15.3% on the news that Biglari Capital offered to acquire the company. Reports revealed LOCO was evaluating the proposal, indicating that a deal was likely to be done. Importantly, Biglari already held approximately 15% of LOCO's shares, making it a significant stakeholder with vested interest in the company's direction.

El Pollo Loco is up 8.4% since the beginning of the year, and at $11.19 per share, it is trading close to its 52-week high of $11.71 from December 2025. Investors who bought $1,000 worth of El Pollo Loco’s shares 5 years ago would now be looking at an investment worth $567.39.

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