BTN News: On Monday, July 15th, shares of firearm manufacturers saw a significant increase following the attempted assassination of former U.S. President Donald Trump during a rally in Pennsylvania on Saturday. The stock for Smith & Wesson Brands surged by 10%, while Sturm, Ruger & Co. experienced an approximate 7% rise by midday, according to NBC News.
Market Reactions and Speculations
The stocks of these companies, which produce various firearms including pistols, revolvers, hunting rifles, and semi-automatic rifles, reacted sharply even though authorities have not disclosed the manufacturer of the weapon used in the attack. Steve Sosnick, chief strategist at Interactive Brokers, explained that such stock movements are often impulsive reactions to current events. “The question is, will the rally in their shares persist or fade?” Sosnick remarked. “We won’t know the lasting effect until they make a public statement or report their quarterly earnings.”
Historical Trends in Gun Stocks
Historically, firearm company stocks tend to experience short-term increases following political or legal decisions perceived as indicators of rising domestic unrest or potential gun control measures, prompting people to stock up on firearms. During the pandemic, demand for firearms from Ruger and Smith & Wesson spiked but generally declined as the economy reopened, The Independent reported.
Divergent Financial Performances
Financial performances of these companies have varied in recent years. Smith & Wesson’s stock price has doubled since December 2022, while Ruger’s shares have fallen by 10% during the same period. “It’s hard to escape long-term financial fundamentals,” Sosnick added. “If there’s a perception that the weekend’s events could boost gun sales, this will be confirmed over time. We’ll know when these companies report their earnings.”
Trump Media & Technology Group’s Stock Movements
The news also influenced Trump Media & Technology Group’s stock, which saw a notable rise on Monday. The company’s stock, driven by media headlines, remains highly volatile. Former President Trump is the largest shareholder of the parent company of Truth Social. Matthew Tuttle, CEO of Tuttle Capital Management, noted that “it’s all about the Trump trade right now.” He highlighted that the surge in Trump Media’s stock was anticipated, as investors view these shares as a “direct Trump trade.”
Broader Market Impacts
The likelihood of Trump’s potential victory contributed to the stock rise, according to PredictIt data. Trump Media’s shares have been volatile since their debut in March, reflecting the fluctuating chances of Trump and President Joe Biden winning the presidential race. Stocks linked to cryptocurrencies, such as Coinbase Global Inc. and Marathon Digital Holdings Inc., also benefited from Bitcoin’s rally. Health insurers, seen as potential beneficiaries of reduced regulation under a Trump administration, experienced gains as well. In the S&P 500, Tesla Inc. led the gains following Elon Musk’s endorsement of Trump, Bloomberg reported.
Solar Energy Stocks Decline
In contrast, solar energy firms’ stocks fell. The Invesco Solar ETF recorded its largest drop since February, influenced by the perception that Democrats are more supportive of this sector.
Conclusion
In summary, the attempted assassination of Donald Trump has had a profound impact on the stock market, particularly for gun manufacturers and companies associated with Trump. As events unfold and companies report their financial results, the lasting effects of these developments will become clearer. Investors are closely watching for any further indications of how these political and social events will shape market dynamics.
