“The Swift Effect” Strikes Again: Here’s How the Singer’s Engagement Announcement Impacted Jewelry Stocks This Week

Key Points

• Taylor Swift’s engagement announcement caused jewelry stocks to rise.

• Swift’s massive fanbase has shown it can make an impact on the economy.

• Still, the effects of the announcement may already be receding.

• 10 stocks we like better than Signet Jewelers ›

It didn’t turn out to be a “Cruel Summer” for singer Taylor Swift: she and Kansas City Chiefs tight end Travis Kelce, in a continuation of their ongoing “Love Story,” have officially told each other, “You Belong With Me.”

The pop icon, self-made billionaire, and self-described “Anti-Hero” announced her engagement to Kelce in an Instagram post on Tuesday. Sure enough, where there used to be a “Blank Space” on Swift’s ring finger, she was now “Bejeweled” with a large engagement ring (and we hope she doesn’t accidentally “Shake It Off”).

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Swift surely knew “All Too Well” that the announcement would make “Sparks Fly” among her legion of fans (to them I say, “You Need to Calm Down”), but even in her “Wildest Dreams,” she probably never expected the news to affect the stock market.

But it did. Here’s how.

Image source: Getty Images.

Look what you made me do…to the market

In the immediate wake of the announcement, as fans were still trying to identify the exact cut of the diamond in Swift’s ring (it was a “cushion cut,” for those who are interested), there was a brief, otherwise-unexplained 1% pop in the stock price of Signet Jewelers Limited (NYSE: SIG), one of the few publicly traded jewelry companies.

As the afternoon wore on, Signet’s shares climbed higher in a rally continued through Wednesday and into Thursday’s premarket trading, when Signet’s stock briefly hit $95/share, up nearly 10% over the pre-“pop star pop” price. The Swift Effect was even more pronounced for Brilliant Earth Group (NASDAQ: BRLT), which soared from $2.17/share at 12:50 PM on Tuesday to close at $2.82/share, a 30% gain.

Even luxury brands only partially exposed to the jewelry market rose in the wake of the announcement: Movado Group (NYSE: MOV), which is primarily a watchmaker but does sell other jewelry items, and LVMH (OTC: LVMHF), which owns Tiffany & Co., were both up more than 4% over their pre-engagement price at Thursday’s close.

Today was a fairytale

It’s not the first time that Taylor Swift’s legions of fans — known as “Swifties” — have collectively influenced the financial world. In July 2023, the Federal Reserve’s Beige Book credited Swift’s “Eras” tour as being responsible for the strongest month of hotel revenue in Philadelphia since the pandemic. This mirrored reports from Cincinnati and Chicago, among many other cities, that credited the “Eras” tour for record hotel revenues.

So how did this happen? There was likely a noticeable spike in internet searches for various types of wedding rings in the wake of Swift’s announcement as eager fans tried to identify the exact ring in question (and possibly score one for themselves). That activity may have triggered certain traders’ algorithms to buy jewelry stocks…or perhaps there are just plenty of Swifties among the ranks of hedge fund managers.

The money question is, could this one-time pop in interest translate into a meaningful increase in jewelry sales, or lasting gains for these jewelry stocks?

Is it over now?

Unfortunately, it looks like the rally may already be fizzling. Although Signet Jewelers closed on Thursday at $89.86/share, which is 3.6% above its pre-engagement price, it had fallen significantly from its post-engagement high of $95. Brilliant Earth Group also closed lower on Thursday at $2.69/share, though that was also well above its pre-engagement price.

Getting engaged is a much bigger commitment than buying an album or attending a concert (although the cost of some resold “Eras” tour tickets could have funded an entire wedding and then some). Sure, it might be fun to dream about getting a ring like Taylor Swift, or to shop for one online, but even if you idolize Swift, will her engagement really prompt legions of uncommitted Swifties to propose? (Don’t get me wrong: I know the intensity of Swift’s fandom is strong…but that strong?)

Meanwhile, all of the aforementioned jewelry and jewelry-adjacent companies have significantly lagged the S&P 500 over the past five years: some by a little (Signet is trailing on a total return basis by about 35 percentage points) to a lot (Brilliant Earth is “Down Bad,” by a jaw-dropping 130 percentage points).

I’d classify those returns as not just in the “Red,” but redder than “Bad Blood,” and it’ll take more than a one-time surge of interest from Swifties to make me say anything besides “I Knew You Were Trouble” and “We Are Never Ever Getting Together.”

That said, whichever jeweler can be the first to mass-produce a Taylor Swift-inspired cushion-cut engagement ring will almost certainly have a hit on their hands.

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John Bromels has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.