So far this month, two factors have enabled shares in Chinese EV company Nio (NYSE:NIO) to make their way back toward $40 per share. First, worries about investing in China have eased a bit. Issues like the Evergrande (OTCMKTS:EGRNF) crisis, as well as China’s crackdown on some of its largest companies, are weighing less on names like NIO stock.

Second, the U.S. stock market, as measured by indices like the S&P 500, has recovered from its losses seen last month. Just like the worries about China have eased, so, too, have the worries that drove the late September dip in stocks (Federal Reserve tapering, rising inflation, rising bond yields).

Along with its reporting another strong month of deliveries, it may seem as if Nio has enough in play to continue its rebound. Or does it?

Fears among U.S. investors about buying China stocks have fallen. But there’s still something that could impact shares in companies with high exposure to the country. Although the market has shrugged off inflation, interest rate and tapering worries for the umpteenth time, it could still drive a big decline for stocks (particularly growth stocks).

Add it all together, and (in the short term), there’s still more risk than reward. This makes it best to hold off buying at today’s prices.

Results Remain Strong for NIO Stock—But for How Long?

As reported on Oct. 1, Nio saw an all-time high in its monthly vehicle deliveries. For September, the EV maker delivered 10,628 vehicles. That’s 125.7% above deliveries in the prior year’s month, and 80.7% above the 5,880 vehicles it delivered in August. To top it all off, in the same press release, the company disclosed it had completed it first batch of deliveries to Norway—its first market outside of China.

What are the takeaways here for NIO stock? For one, the global chip shortage may no longer be something that affects its results. In turn, it may be on the path to hitting revenue growth projects for this year (120%) and the next (65%). Along with this, now that Nio open for business in Norway, in the next few months we’ll have our first indication whether this company, so far entirely a play on the rise of EVs in its home market, stands to become a global EV maker on par with Tesla (NASDAQ:TSLA).

On the other hand, while I can’t argue against these strong results, I can argue that there’s an emerging issue right now that may threaten the good times to keep on rolling for the company: China’s economic slowdown. After the strong GDP growth fueled by the country’s economy being in “recovery mode” from Covid-19, GDP growth is slowing down. Worse yet, the world’s second largest economy may be at risk of facing a stagflation scenario. Much like the one that played out in the U.S. during the 1970s.

It’s not for certain yet that China faces a slower-moving economy in the quarters ahead. But if it does, it could impact Nio’s results in the near term.

Along With a China Slowdown, A Possible U.S. Market Maelstrom Could Also Drive it Lower

Besides the risk that demand for its EVs takes a hit, there’s something else that could knock NIO stock back down. That would be a possible market sell-off. Admittedly, I have argued in the past that changes in Fed policy will drive a big decline in growth stock valuations. And yes, so far, it hasn’t really happened.

Nevertheless, as inflation remains elevated, it’s becoming harder for the Fed to argue its “transitory” thesis. In fact, one Fed Governor (Randal Quarles), while still in the “inflation is transitory camp,” concedes that if rising prices carry on until Spring 2022, interest rate liftoff may have to happen sooner than expected.

What does Fed policy have to do with Nio, and possible declines for its stock? If rates go up, this will cause valuations of fast-growing companies to come down. Why? Valued on future profits, growth stock’s present values go down as the discount rate goes up.

Whether multiple compressions causes a big or small drop for NIO stock remains to be seen. Continued strong sales in China, plus positive initial results from Norway, could soften the blow.

Perhaps a Buy On Weakness, But Skip Out on NIO Stock Today

While high growth still appears to be on the menu, overarching issues like a Chinese economic slowdown could threaten NIO. In addition, a rise in interest rates could knock it down as well. With this in mind, what’s the best move with Nio stock right now?

If you’re bullish on it long term, wait for its next bout of weakness. But as NIO stock is trending higher? It’s best to avoid.

On the date of publication, Thomas Niel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.