How is sexual selection evolutionarily stable?
first off you are talking about runaway sexual selection, run away sexual selection works because attracting mates matters MORE than individual survival. An immortal survivally perfect creature that cannot mate is an evolutionary dead end and might as well not exist where its genes are concerned. A bright red neon sign on your back that draws  the attention of potential mates is an advantage as long as it attracts mates more often than it attracts predators. Coincidentally this is why so many sexual displays are things you can turn off, even a peacock can fold its tail fan down. These displays often exploit existing attention  factors, like eye shaped objects, bright contrasting colors, loud noises, ect, things organisms are already predisposed to pay attention to.  Of course once neon sign displays exist your second idea comes into play, once neon signs are in play a female is best served if her own male offspring and descendants also have neon signs, which makes attraction to the  neon signs (and thus the genes making them) an advantage.
For normal sexual selection both your ideas also come into play, likely more often. common attractive features are things like size, symmetry, health, or excess energy, direct signs of fitness.
Most of the time displays reaches a point of stability where the cost is balanced by the attractiveness, this is how most displays work.  But sometimes runaway selection can drive it past the point of no return, where the cost of reducing it is so high (lack of mates) the only winning strategy is to invest more and more, on and on until the cost is so high you never get a chance to mate.