What Happened?

Shares of american firearm manufacturing company Ruger (NYSE: RGR) jumped 2.6% in the afternoon session after comments from a key Federal Reserve official bolstered hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.

After the initial pop the shares cooled down and closed the day at $29.46, up 2.4% from previous close.

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What Is The Market Telling Us

Ruger’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The previous big move we wrote about was 15 days ago when the stock dropped 12.8% on the news that its third-quarter financial results showed a significant miss on profit expectations, even as revenue slightly beat Wall Street's estimates. 

The company reported adjusted earnings per share of $0.11, which was 69% below analyst forecasts and a steep decline from the $0.28 per share earned in the same period a year ago. While net sales grew 3.7% year-over-year to $126.8 million, this positive was overshadowed by a sharp drop in profitability. Ruger’s operating margin swung from a positive 3.1% in the prior year's quarter to a negative 2.7%, indicating that the company's expenses grew much faster than its sales. The steep earnings miss and deteriorating margins appeared to be the primary drivers of the negative investor reaction.

Ruger is down 14.3% since the beginning of the year, and at $29.88 per share, it is trading 36.6% below its 52-week high of $47.13 from October 2025. Investors who bought $1,000 worth of Ruger’s shares 5 years ago would now be looking at an investment worth $477.24.

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