U.S. stocks finished 2012 on a positive note, overcoming anxieties related to the looming fiscal cliff. The S&P 500 recorded its strongest annual performance since 1997, even as the year-end rally faltered.

Despite the political uncertainty surrounding tax increases and spending cuts, investors maintained a generally optimistic outlook, buoyed by hopes of a forthcoming agreement in Washington.

Key highlights of the year included:

• The S&P 500’s significant rise, showcasing resilience in the face of economic headwinds.
• A late-year pause in the market’s upward trajectory, attributed to fiscal cliff concerns.
• Continued investor confidence, fueled by expectations of a resolution to the fiscal impasse.

Analysts suggest that the market’s performance reflects underlying economic strength and the anticipation of proactive measures to address fiscal challenges.