Gun stocks rose Monday following the deadliest mass shooting in modern American history late Sunday night.
At least 58 people were killed and 515 injured when a gunman in a hotel room at the Mandalay Bay fired hundreds of bullets on the audience at a country music festival, police said. The suspect, who was found dead, was identified by police as 64-year-old Stephen Paddock.
Shares of Sturm, Ruger & Company (RGR) were up 6%, while American Outdoor Brands (AOBC), the company formerly known as Smith & Wesson, gained nearly 7% in the hours after the shooting, CNN reported Monday.
Stocks have tended to rally in the immediate aftermath of mass killings, as was the case in the days after the deadly mass shooting at Pulse nightclub in Orlando in June 2016.
Before Monday’s Las Vegas massacre, the deadliest mass shooting in modern history had been the terrorist attack at Pulse nightclub in Orlando, Fla., where 49 people were killed in June 2016.
Investors have previously bet that following the massacres in San Bernardino in December 2015, the Aurora, Colorado movie theater and Sandy Hook Elementary School in Newtown, Conn. in 2012, tougher gun control laws would be inevitable especially because of tough talk from President Obama.
As CNN notes:
The stricter laws never materialized. Instead, gun sales climbed during the Obama administration’s two terms as gun aficionados bought more firearms just in case rules changed at a national level or in individual states controlled by Democrats.
But shares of Sturm Ruger and American Outdoor Brands have both fallen sharply since Donald Trump, who was endorsed by the National Rifle Association, was elected president.
Investors had feared that a win by his opponent, Hillary Clinton, last year would have led to stricter regulations.
Trump’s win removed those fears, and gun company sales and profits have plunged as a result. FBI background checks for firearms have fallen as well.