How Sydney Sweeney’s political American Eagle ad paid off
Never mix politics with business. That’s what we’re always told. And when Tesla’s leadership became Politicised, that rule held true: the stock plunged, and the backlash was loud.
But what if Politicisation didn’t punish a stock: it propelled it?
Last time, we explored how Tesla’s Politicisation triggered Risk Aversion and massive selloffs. This time, we flip the script.
In July 2025, American Eagle (AEO) launched a controversial ad starring Sydney Sweeney. Days later, the stock surged 23.65% after Donald Trump publicly endorsed the campaign: its biggest single-day gain since 2000.
This is a case where Politicisation didn’t spell disaster. It created momentum instead, based on a fan-favourite story.
The power of Narrative Fallacy
Narrative Fallacy is when we act on a story that feels true, even if it’s not backed by hard data. In American Eagle’s case, a swirl of symbols, endorsements, and assumptions built a powerful narrative. That story shaped perception, politicised the brand, and moved the stock.
And it made it soar.
Let’s take a deeper look at what happened.
Navigating the market
On Wednesday July 23 at 9:57 AM Eastern Daylight Time just after markets opened, American Eagle launched an ad campaign starring American actress Sydney Sweeney.
The campaign featured Sweeney in full denim-on-denim, with the cheeky slogan ‘Sydney Sweeney Has Great Jeans’ superimposed over her photo, a phrase that played on the meaning of ‘jeans’ and ‘genes’.
The campaign’s video ads further featured a voiceover by Sweeney, in which narrated that ‘Genes are passed down from parents to offspring... My jeans are blue.’
Politicisation of American Eagle explained
It was this cheeky wordplay, specifically its implication, that sparked such controversy for the Sydney Sweeney x American Eagle campaign.
By linking a blonde, blue-eyed actress to the phrase ‘great genes’, many critics, like cultural analysts and everyday viewers, saw echoes of a troubling narrative: the idea of genetic superiority.
With political figures like US Vice President JD Vance publicly praising the ad, it quickly became a flashpoint, interpreted as a political symbol of a cultural shift to traditional, exclusionary ideas, and sparked fierce debate.
Brand impact
As the saying goes, no publicity is bad publicity. The controversial Sydney Sweeney campaign sparked a wave of brand momentum:
The youth fashion brand’s US website traffic jumped 60% during the campaign’s launch week.
In-store visits hit a five-year high, according to Placer.ai.
Sweeney’s Instagram posts drew over 2.3 million likes.
TikTok views topped 12 million.
The denim firm’s sales surged 34%.
Stock impact
The brand awareness generated by Sydney Sweeney’s campaign translated into a similar market performance for American Eagle, showing how those who trade stocks respond to cultural momentum.
After US President Trump posted on his Truth Social platform that Sweeney ‘has the HOTTEST ad out there [and] the jeans are “flying off the shelves”’ at 11:42 AM EDT on Monday August 4, investor enthusiasm immediately sparked. AEO shares began climbing sharply within the next hour. The result was a 23.65% surge in a single day from $10.84 to $13.41, American Eagle’s biggest daily gain since 2000!
Although AEO stock fell 9.5% to $12.02 on August 5 due to profit-taking and a JPMorgan downgrade, it rebounded to $13.19 by August 19 (above its August 4 close), suggesting that the rally had strong legs, not just hype.
Mastering the behaviour
Unlike Tesla, American Eagle’s stock surged after Politicisation.
But while Tesla’s sell-off was sparked by Elon Musk’s direct Politicisation, the youth fashion brand’s Politicisation was implied: powered by a story people believed to be true, even if it wasn’t rooted in fact.
That’s Narrative Fallacy in action.
What is Narrative Fallacy?
Narrative Fallacy is when we connect events into a story that feels true, even if it's not backed by facts. In this case, Sydney Sweeney’s looks, Republican praise, and American imagery combined into what many perceived as a political statement.
The stock didn’t rise on facts: it rose on a story.
What are the elements of Narrative Fallacy?
Narrative Fallacy is when we act on a story that feels true, even if evidence is thin.
In the case of the American Eagle ad, a chain of loosely connected facts created the illusion of Politicisation.
Pattern seeking
Our brains naturally connect dots, even when they shouldn’t.
Sweeney’s blonde hair and blue eyes paired with the ‘great genes/jeans’ pun triggered deeper cultural associations. Her Republican voter registration (surfaced in a viral X post on August 2) and Trump’s endorsement completed the narrative.
All these factors came together to form a ‘story’ in people’s minds.
Emotional resonance
When something hits a nerve (triggering identity, outrage, or belonging), it sticks.
The campaign’s slogan sounded like a denim pun, but it hit harder, triggering emotional responses tied to identity and belonging.
Simplification bias
We turn complex events into simple takeaways.
A layered ad campaign was reduced to a headline: ‘conservative rally cry’.
Confirmation bias
We notice what matches that we already believe.
Audiences saw what fit their worldview:
- • Conservatives embraced the ad
- • Progressives condemned it
This is confirmation bias in action: one campaign, two realities.
POLITICISATION CASE STUDY: Tesla vs American Eagle (2025)
Narrative Fallacy politicised American Eagle, but it wasn’t alone.
Tesla also faced Politicisation this year too, as covered in our earlier blog. But while American Eagle was rewarded, Tesla was punished.
Same year, same phenomenon. But different outcomes. To see how context shapes outcomes, compare American Eagle to Tesla.
The Politicisation of Tesla
On 10 March 2025, Tesla’s stock dropped 15% after Elon Musk’s Politicisation polarised reception to the brand. For its traditionally progressive, tech-savvy audience, the narrative clashed with core values. Emotional dissonance set in, the brand felt unfamiliar, and the markets punished it.
Difference to AEO
American Eagle didn’t push a political message: the public built one. A denim ad morphed into a conservative rallying cry, and the market rewarded it.
The difference? Emotional alignment.
The denim firm’s audience was politically neutral (young, style-driven, culturally mainstream). But the ad struck a chord with conservatives, who saw their values reflected, their identity affirmed and claimed the brand as their own.
Conquering the cognitive
Narrative Fallacy is powerful. It turns stories into facts, and facts into price moves. But if you want to see patterns clearly, you need to pause before buying the plot.
Ask yourself:
- • Does the data match the drama?
- • Where’s the story going, and who’s likely to follow it?
Shift gears:
- • Examine fundamentals
- • Compare sentiment to performance
- • Check where the asset stands right now
Match the story to the brand’s audience:
- • If there’s a clash, expect a sell-off.
- • If there’s a match, the price could fly.
This is the cognitive pivot. The moment you stop reacting and start analysing (the story, its strength, its audience fit) you stop trading myths. You start seeing the market.
That’s the shift from instinct to insight. From System 1 to System 2 thinking.
What is System 1 vs System 2 thinking?
System 1 and System 2 are two modes of thinking described by Nobel laureate Daniel Kahneman.
System 1
System 1 is fast, automatic, and emotional. It helps us spot patterns, react quickly, and follow gut instincts.
In trading, System 1 makes you chase viral headlines, or jump on hype-fuelled price surges.
System 2
System 2 is slow, deliberate, and analytical. It kicks in when we pause, think critically, and check the facts.
In trading, System 2 helps you step back, question the narrative, analyse the data. With this, you can spot when a price move is driven more by sentiment than substance.
When you engage System 2 thinking, you start dissecting market stories. You begin to see how Narrative Fallacy can shape market moves. You start seeing where a stock can go next, regardless of its current fundamentals.
Winning wisdom wrap up
Narratives move markets, but the direction depends on how they resonate.
American Eagle’s denim ad became a politicised symbol, fuelled by Narrative Fallacy and powered by emotional alignment.
The lesson?
It’s not the story. It’s who believes it.
If the story matches the audience, the stock can soar.
If it clashes, expect a sell-off.
System 2 thinking helps you step back, assess where the asset stands, and more importantly, where the story is likely to take it.
Final thoughts
As of 4 September 2025, AEO trades at $13.62, up 0.81% on the day.
Its Q2 earnings beat expectations, and a new campaign featuring Travis Kelce and Sweeney’s original continue to fuel growth.
When a narrative resonates with the right audience, it becomes more than sentiment. It drives performance.
That's the power of emotional alignment.
That’s the risk, and the reward, of Narrative Fallacy.
Disclaimer:
Please note that the information provided in this article was accurate at the time of writing. Market conditions and economic data can change rapidly. This content is intended for informational purposes only and should not be used as the sole basis for making financial decisions.
Never mix politics with business. That’s what we’re always told. And when Tesla’s leadership became Politicised, that rule held true: the stock plunged, and the backlash was loud.
But what if Politicisation didn’t punish a stock: it propelled it?
Last time, we explored how Tesla’s Politicisation triggered Risk Aversion and massive selloffs. This time, we flip the script.
In July 2025, American Eagle (AEO) launched a controversial ad starring Sydney Sweeney. Days later, the stock surged 23.65% after Donald Trump publicly endorsed the campaign: its biggest single-day gain since 2000.
This is a case where Politicisation didn’t spell disaster. It created momentum instead, based on a fan-favourite story.
The power of Narrative Fallacy
Narrative Fallacy is when we act on a story that feels true, even if it’s not backed by hard data. In American Eagle’s case, a swirl of symbols, endorsements, and assumptions built a powerful narrative. That story shaped perception, politicised the brand, and moved the stock.
And it made it soar.
Let’s take a deeper look at what happened.
