Shares of major gun manufacturers rose in trading Monday following the deadliest mass shooting in modern US history.
At least 59 people were killed and 527 were injured in the shooting Sunday night in Las Vegas. A gunman identified as Stephen Paddock opened fire from the 32nd floor of the Mandalay Bay Resort and Casino, aiming into a tightly packed crowd of thousands of people who were watching a country music festival, the police said.
Gun stocks tend to rally after mass shootings. Heightened conversation about potential gun-control legislation raises speculation that people would want to buy firearms sooner rather than later before any regulations could be tightened. In its annual reports, American Outdoor Brands has told 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 last year's US 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.
American Outdoor Brands fell 46% from the election through Friday's market close, while Sturm Ruger was down 19%.