Topline

The share prices of U.S. gun- and ammunition-makers shot up Thursday after the Supreme Court struck down a New York law restricting concealed carry, the widest expansion of gun rights in over a decade that could lead to further rollbacks across the nation.

Key Facts

In a 6-3 ruling on Thursday, the U.S. Supreme Court struck down a New York state law restricting firearm owners from having a concealed carry weapon permit unless they had “proper cause” to do so and demonstrated “good moral character.”

In a major blow for gun control advocates, Supreme Court justices ruled that New York’s concealed carry law violated the Fourteenth Amendment by stopping “law-abiding citizens with ordinary self-defense needs” from practicing their Second Amendment right to bear arms.

The share prices of major gun and ammunition-makers surged higher following the Supreme Court decision: The largest public U.S. gunmaker ($1.1 billion market value), Sturm, Ruger & Company, saw its stock rise nearly 3%.

Shares of Smith & Wesson Brands, the second-largest gunmaker ($600 million market value), jumped over 6%, and major ammunition-makers such as Vista Outdoor and Ammo Inc. also shot higher, both rising by around 3% or more.

Other gun- and ammo-related stocks also rallied on Thursday: Big 5 Sporting Goods jumped nearly 5% and American Outdoor Brands rose roughly 6%, while weapons producer Axon Enterprises gained over 3%.

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Key Background:

Shares of gun and ammunition companies typically tend to rise after mass shootings or amid political discussions around stricter gun laws, as Americans tend to stock up ahead in anticipation of tighter restrictions. Amid a high number of mass shootings—roughly 250—so far in 2022, there has been renewed debate on gun control legislation in Congress and elsewhere. Sturm, Ruger & Company’s stock is only down roughly 8% this year, outperforming the rest of the market amid the ongoing selloff in 2022. Shares of Smith & Wesson, Ammo Inc. and Vista Outdoor have all fallen by 20% or more, however.

Crucial Quote:

In the case of the New York State Rifle & Pistol Association v. Bruen, the Supreme Court ruled on Thursday that the Second Amendment’s definition of the right to “bear arms” includes “carrying handguns publicly for self-defense.” Other constitutional rights don’t “require individuals to demonstrate to government officers some special need,” the justices added.

What To Watch For:

Whether the Supreme Court decision on New York’s concealed carry law will set a precedent that could overturn similar laws in other Democratic states. At least eight other states and the District of Columbia all have similar regulations where authorities have some discretion when it comes to issuing concealed carry permits to citizens.

Further Reading:

Supreme Court Strikes Down N.Y. Concealed Carry Law—Could Lead To Rollbacks Nationwide (Forbes)

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