Shares of gun and ammunition companies jumped Wednesday over speculation of new gun control laws in the wake of Tuesday's horrific mass shooting that killed at least 19 children and two teachers at a Texas elementary school. Investors anticipate increased sales ahead of calls for stricter gun laws by Democrats.
As of Wednesday afternoon, Smith & Wesson Inc. and Vista Outdoors Inc. were both up around 10%, American Outdoor Brands Inc. +6.5%, Sturm Ruger & Co. +5.5%, and Ammo Inc. +5%.
Gun makers' shares typically rise when Democrats call for stricter gun control measures after mass shootings because people buy on the fear that more rules could make owning a gun harder or costlier. This was the case in 2012 when gun sales soared after the shooting in Newtown, Connecticut, at Sandy Hook school.
Search trends for "buy a gun" immediately erupted Tuesday evening after the shooting at the elementary school in Uvalde, Texas.
Even though Democrats and President Biden have vowed to get tough on guns, Senate Majority Leader Charles Schumer (D-N.Y.) was out Wednesday, indicating new gun control measures would be hard to pass because there isn't enough Republican support. Still, some fear the Biden administration will get tough on guns via executive fiat.