What happened

Shares of GameStop (GME -6.49%) are running 7% higher as of 10:44 a.m. ET on Tuesday, on a day when the stock market as a whole is just inching higher. The S&P 500 is up just 33 points, or less than 1% in comparison.

There is no news to account for the stock of the video game retailer jumping so much higher this morning, and in fact there is good reason it should be heading lower.

Video game players cheering.

Image source: Getty Images.

So what

GameStop is, of course, still a heavily shorted stock, with some 20% of its shares outstanding sold short, giving it a short interest ratio of 7.6 (anything over 7 is considered a lot). It was an even heavier short interest that caused GameStop to become one of the market's hottest meme stocks last year as Reddit investors induced a massive short squeeze.

Yet it's fallen far from those highs and at around $26 per share is down sharply, even in comparison to more recent bumps in its price. The high short interest and lingering interest in stock chat rooms makes it a volatile stock, the kind that will often rise and fall on good news, bad news, or no news whatsoever.

Now what

The video game industry continues to trend lower from the highs it hit during the early months of the pandemic and its lockdowns. Last Friday NPD analyst Mat Piscatella tweeted out that spending on video game content, hardware, and accessories in the U.S. fell 4% in September compared to the year-ago period, or some $4.1 billion. He notes consumer spending is now down 8% from 2021.