WASHINGTON (AP) — The Federal Reserve said Wednesday business contacts in many regions of the country are expressing less optimism amid a host of adverse developments, from plunging stock prices to uncertainty about a widening trade war.

In its latest report on economic conditions around the country, the Fed said that eight of its 12 regions reported the economy was expanding at a moderate pace as the new year began.

While the outlook remained generally positive, the report said that business executives had grown more worried about "increased financial market volatility, rising short-term inte...