Jest parsing fails with the simple implementation of axios

Created by: siddtheone

Describe the bug

Execute npx create-react-app test --template typescript
Move to new app cd test
Execute tests by npm run test press a to execute all tests and observe that all tests are passing.
Install axios by running npm i axios
Add following code to the App.tsx file

import axios from "axios";
import React, { useEffect } from "react";
import logo from "./logo.svg";
import "./App.css";

function App() {
  useEffect(() => {
    axios.get("https://jsonplaceholder.typicode.com/posts");
  }, []);
  return (
    <div className="App">
      <header className="App-header">
        <img src={logo} className="App-logo" alt="logo" />
        <p>
          Edit <code>src/App.tsx</code> and save to reload.
        </p>
        <a
          className="App-link"
          href="https://reactjs.org"
          target="_blank"
          rel="noopener noreferrer"
        >
          Learn React
        </a>
      </header>
    </div>
  );
}

export default App;

Tests starts failing with the following error

My package.json is as below

{
  "name": "test",
  "version": "0.1.0",
  "private": true,
  "dependencies": {
    "@testing-library/jest-dom": "^5.16.5",
    "@testing-library/react": "^13.4.0",
    "@testing-library/user-event": "^13.5.0",
    "@types/jest": "^27.5.2",
    "@types/node": "^16.18.11",
    "@types/react": "^18.0.27",
    "@types/react-dom": "^18.0.10",
    "axios": "^1.2.4",
    "react": "^18.2.0",
    "react-dom": "^18.2.0",
    "react-scripts": "5.0.1",
    "typescript": "^4.9.4",
    "web-vitals": "^2.1.4"
  },
  "scripts": {
    "start": "react-scripts start",
    "build": "react-scripts build",
    "test": "react-scripts test",
    "eject": "react-scripts eject"
  },
  "eslintConfig": {
    "extends": [
      "react-app",
      "react-app/jest"
    ]
  },
  "browserslist": {
    "production": [
      ">0.2%",
      "not dead",
      "not op_mini all"
    ],
    "development": [
      "last 1 chrome version",
      "last 1 firefox version",
      "last 1 safari version"
    ]
  }
}

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