Cock fighting was popular entertainment in Shakespeare’s day, and because taverns and inns sometimes provided a place for this sport, it was not unusual for them to have names such as "The Cock Pit" or "The Fighting Cocks.”  These establishments would hang a metal sign out front consisting of a rooster set inside a hoop. To be the cock in the hoop meant to act loudly and aggressively, like a fighting rooster.  It also implied that the aggressive behavior came from drinking too much. That's why Lord Capulet is angry at Tybalt: he’s worried that his hotheaded nephew will get drunk and cause a scene by confronting Romeo in front of all his guests.