Shares of major gun manufacturers rose in pre-market trading Monday following the deadliest mass shooting in modern US history.
American Outdoor Brands (formerly Smith & Wesson) and Sturm, Ruger & Co. rallied nearly 4%. Gun stocks tend to rally after mass-shooting incidents. Heightened conversation about gun control raises speculation that people would want to buy firearms sooner rather than later before any regulations were tightened.
In its annual reports, American Outdoor Brands has said to investors several times that “speculation surrounding increased gun control at the federal, state, and local level and heightened fears of terrorism and crime” can affect demand for its products. Gun sales have been on the decline since the election, according to several manufacturers and the FBI’s database of background checks that serves as a proxy. Purchases reached a record last year, but President Donald Trump’s surprise victory eased concerns that regulations would be tightened.