The pan-European Stoxx 600 hovered fractionally below the flatline in early trade, with autos sliding 1.4% while tech stocks gained 1.4%.

The mixed trade for European stocks comes after markets pulled back slightly on Tuesday, tracking risk-off sentiment globally as investors assess whether last month’s rally has further to run.

In the United States, the three major averages fell for a second consecutive day yesterday, although Dow Jones Industrial Average futures were higher last night.

In regular hours trading, House Speaker Nancy Pelosi’s controversial visit to Taiwan weighed on investors, who worried it would further strain already tense U.S.-China relations. China had spent weeks warning her not to make the trip.

Markets fell further after three Federal Reserve presidents hinted that further rate hikes would be necessary to combat high inflation.

Overnight, shares in the Asia-Pacific were mostly higher Wednesday, with mainland China markets leading gains despite Pelosi’s trip to Taiwan, which is being closely watched by Beijing.

China’s Foreign Ministry spokesperson Hua Chunying tweeted that Pelosi’s visit was a “major political provocation,” while a spokesperson for the People’s Liberation Army’s Eastern Theatre Command said it would conduct “a series of joint military operations around the Taiwan Island from the evening of August 2.”

Those operations include long-range combat fire live shooting in the Taiwan Strait and conventional missile firepower test launching, the statement said.

It’s a busy day for earnings in Europe, with Commerzbank, SocGen, BMW, Banco BPM, Siemens Healthineers and Veolia and Wolters Kluwer among the companies reporting before the bell.

Shares of Czech cybersecurity firm Avast soared 42% after the U.K.’s competition regulator provisionally cleared its $8.6 billion sale to U.S. peer NortonLifeLock.

At the bottom of the Stoxx 600, British insurer Hiscox fell 7.9% after reporting a first-half loss. Siemens Healthineers and BMW fell 7.7% and 5.2% respectively after their earnings reports.

On the data front, euro zone producer prices and retail sales data for June are set to be released.