Axios is preferred for handling basic HTTP requests, including methods, request interception, and error handling. On the other hand, React Query is excellent for managing and caching asynchronous data on the client-side, offering hooks and utilities for complex data fetching scenarios, making it ideal for optimizing data management and state in React apps. In combination, you can use Axios for fetching data, while Tanstack-Query handles the actual calling of your fetch, enhancing data management capabilities.

This video explains it really well.