Blizzard has released a fresh update (1.3.5) for Diablo 4, which introduced official ray tracing support to the game. With this feature enabled, shadows and reflections should now appear more realistic.
Features of the 1.3.5 update:
The developers also revealed the minimum system requirements needed for ray tracing in Diablo 4:
The launch of Diablo IV was just the beginning for us. We are regularly iterating based on player feedback and exploring how we can enhance the visuals and dark atmosphere of the game. The addition of ray-traced effects is our next step in making the brutal world of Sanctuary feel more immersive than ever. Effects like lightning strikes are now reflected in pools of blood and water, dank cellars and dungeons are more foreboding with realistic soft shadows, and the open world and towns are more grounded with additional realistic shadows and reflections. We are very excited for our community to experience this new technology.
On the left without ray tracing, and on the right with the RTX feature enabled: