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France’s CAC 40 added 0.4% in early trade to 6,598.28. Germany’s DAX rose 0.6% to 13,904.68. Britain’s FTSE 100 rose 0.4% to 7,539.93. US stocks were set to drift moderately lower with Dow futures falling to 33,869.00. S&P 500 futures fell nearly 0.1% to 4,295.00.

The drop in oil prices is a positive factor for the region. In Japan, recent economic data has shown a recovery, but high rates of COVID-19 are fueling fears that people will be restricted from travel and other economic activities.

Some analysts say share prices have not properly reflected the real risks.

“It doesn’t seem to matter what the news is, there’s just a huge appetite to buy stocks. And to keep buying,” said Clifford Bennett, chief economist at ACY Securities. “To talk about the bottom having already been priced in seems a bit premature. If the market goes down again after all this long positioning, it will come down with a thunderous impact. Buyers beware.”

Japan’s benchmark Nikkei 225 was little changed to end at 28,868.91. South Korea’s Kospi rose 0.2% to 2,533.52. Australia’s S&P/ASX 200 rose 0.6% to 7,105.40. Hong Kong’s Hang Seng reversed course and fell 1.1% to 19,830.52, while the Shanghai Composite gained nearly 0.1% to 3,277.88.

Markets reacted overnight to news that China’s central bank cut a key interest rate, acknowledging that more needs to be done to strengthen its economy. The move is the latest warning for markets already on edge from record inflation and recession fears in the US and elsewhere.

China is the world’s second largest consumer of crude oil, so the news weighed on energy prices. US crude prices fell 2.9% on concerns about the global economy and weighed heavily on energy stocks.

In Tuesday’s trading, benchmark US crude fell $1.46 to $87.95 a barrel. Brent crude, the international standard, lost $1.73 to $93.37.

Global investors are worried that the US Federal Reserve could push too hard and send the economy into recession. Any sign that inflation may be peaking or falling back has helped ease some of those concerns.

“Lack of guidance is what investors will suffer from until we see clearer signs of easing inflation. And that will take time as we need to see a couple of encouraging data to call the fight against inflation a success from central banks. The lack of clear direction is driving markets up and down,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

Investors are also closely watching how inflation affects businesses and consumers. Spending has slowed and the overall economy has already contracted for two straight quarters. Several major retailers will give investors more details on how their businesses are holding up when they report earnings this week.

Home Depot and Walmart report results Tuesday, and Target’s results are due Wednesday. The US Commerce Department also releases its July retail sales report on Wednesday. Economists polled by FactSet expect modest growth of 0.2% from June, when sales rose 1%.

In currency trading, the US dollar rose to 133.85 Japanese yen from 133.27 yen. The euro was at $1.0145, down from $1.0165.

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Yuri Kageyama is on Twitter at https://twitter.com/yurikageyama