Vanity is the subject here, and the speaker looks at it with cool, mocking distance. The poem begins with a "passing fancy," a pretty bauble hung on a head already "full of misty thoughts." From there, the bauble becomes a lure. It is dangled in front of people's eyes, pulling them toward "an empty goal" while light bounces off their "dark spaces."
The speaker doesn't join in the excitement. The sighing and the "clap, clap" read as sarcastic, as if the speaker is watching a crowd admire something cheap. Even the "candlelights" are called fake, which suggests glitter without warmth.
The ending is the bleakest part. The people who chase this shine "drown / in the endless mirror / of their vapid eyes," so their vanity traps them in their own reflection. The mood is scornful and a little chilling. The poem seems to say that being dazzled by surfaces leaves a person hollow, and that nobody notices until it is too late.