The two families in 'Romeo and Juliet' harbored ill feelings toward each other.

Literal

'Romeo and Juliet' [genitive-の] 2-families [topic-は] mutually ill-feelings [object-を] were-holding.

A literary-analysis sentence. 悪感情 (あっかんじょう) is a formal compound for 'bad feeling, ill will,' more elevated than 悪い気持ち. 抱く ('to hold, embrace, harbor') is used figuratively for holding emotions: 希望を抱く (harbor hope), 疑いを抱く (harbor suspicion), 悪感情を抱く (harbor ill will). 互いに ('mutually,' 'each other') is an adverb marking reciprocal action. Note the difference between 互いに (adverb) and お互いに (softer, more polite adverb with the honorific お). The progressive form 抱いていた ('was holding') marks the ongoing state of their enmity.