Gun stocks are rallying after the Florida school shooting

Markets Insider

• Gun stocks are rallying after the Florida school shooting.
• This market reaction has become a pattern after mass shootings amid speculation that people may want to buy more guns if they're worried about new regulations.

The shares of gun manufacturers rose in premarket trading Thursday after the deadliest mass shooting of the year.

At least 17 people died in the shooting at Marjory Stoneman Douglas High School in Parkland, Florida. 19-year-old Nikolas Cruz, the suspected gunman, was armed with an AR-15 semiautomatic rifle and "countless magazines," the Broward County Sheriff's Office said.

American Outdoor Brands, formerly Smith & Wesson, gained 4.4% premarket, while Sturm, Ruger & Co. rose 3%. Olin Corporation, which makes ammunition, gained 2.3%. They all extended Wednesday's gains.

This market reaction has become a pattern after mass shootings because of speculation that people would want to buy firearms sooner rather than later before any new regulations are introduced.

But the Trump administration has not been a boom for gun companies. Sturm Ruger, for example, said demand was stronger than normal in 2016 likely because of election campaigning, but then tanked in 2017. Its third-quarter earnings per share fell in half from the prior year.