It happened on the A48 Clase Road, where a vehicle “sustained damage consistent with a firearms discharge”.
Police said one person had minor injuries but they weren’t currently aware of any serious injuries or fatalities.
A 41-year-old man was arrested on suspicion of possessing a firearm with intent to endanger life and a 16-year-old boy was arrested on suspicion of affray.
South Wales Police said both were from Llansamlet.
Photos show armed officers at the scene and debris scattered behind a car with its number plate hanging off.
Road closures are in place nearby.
Chief Superintendent Stephen Jones said: “A policing presence will be visible in the area whilst this investigation is ongoing.
“It is important that people avoid the area so we can effectively deal with this incident and return the area to normality.”
He said they were aware of footage circulating online and asked anyone with relevant video or information to get in touch.
Police also urged people not to share rumours about the incident and only pass on information from official sources.
