Display is showing bright yellow in "Lit" mode even with the latest GPU driver

Hello, not sure if this is the right place for this, but having an issue with UE5 that I’m hoping someone can help with.

I was getting an error saying that my driver had “known issues”, and so I updated it to the latest version. It still gives me the warning:
image

But the real problem is that now the “lit” view is all messed up, and is showing as very bright yellow:

Unlit view seems okay, but not easy to work with.

What I’ve tried already:

  1. Install different driver version
  2. Restart laptop
  3. Restart UE5
  4. Created a new UE5 project

As per the screenshot above, my GPU is an Intel Iris Xe Graphics, and I’m currently using the latest stable driver available 31.0.101.3430

Please advise what can be done here

Thanks!

To add some more context, I’ve installed UE4 and it works perfectly fine, so this seems to be an issue specifically with UE5

I ended up fixing this (for now) by disabling the “Generate Mesh Distance Fields” option:

I take it back! issue is back and funkier, if anyone has any tips I’m all ears:

Have same issue in built app on Intel Iris Xe. Pleas help

On my end it Sky light causes this issue. Try to remove it.

I fixed this by:
Select your Skylight,
Under Details > Light > change the “Source type” from “SLS Captured Scene”
to “SLS Specific Cubemap”
Then change the “Cubemap” to any HDRI image available in your Editor.