What happened

Although stocks across many sectors were hit today as the broader markets plummeted, companies from high-potential industries that are in their early stages of growth were among the hardest hit. Case in point: hydrogen stocks. At their lowest points through 1 p.m. ET on Tuesday, Plug Power (PLUG -6.95%) had shed 6.7%, Bloom Energy (BE -1.93%) 7.5%, and Hyzon Motors (HYZN 1.44%) 4.9%.

Investors dumped these stocks after the latest economic data refueled fears of an economic slowdown that could force these companies to cut back on their plans.

So what

Although economists expected inflation in the U.S. to drop by 10 basis points in August versus July in what would have been the first signs of inflation cooling down, the latest data from the Bureau of Labor Statistics poured cold water on their hopes. The August Consumer Price Index (CPI) ticked 10 basis points higher, and although inflation dropped year over year, it was still worryingly high at 8.3%.

Since the Federal Reserve's next meeting is just one week away, the markets now expect another jumbo interest rate hike coming up, in line with the 75-basis-point hikes that the Fed announced in June and July. Economists now fear a recession is inevitable in the U.S.

A rising interest rate environment is detrimental for companies that are only just getting started and bank heavily on a healthy economy for sales and outside funding for growth. Hydrogen stocks fall into this category since the green hydrogen industry is still in its nascent stage, and most companies operating in the industry are only just establishing themselves and are yet to turn a profit.

Now what

Days like these are a stark reminder that even if a company is growing steadily and shows promise, its stock price can swing wildly on macroeconomic factors. For example, hydrogen stocks could fall yet again if the Fed hikes interest rates by a big margin next week. The lesson for growth investors here, though, is to not panic and to focus on the long-term prospects of companies instead.

Plug Power, for example, expects to generate annual revenue of $3 billion and exceed 30% in gross margin by 2025. The company is building the world's largest fuel cell and electrolyzer gigafactory in Rochester, New York, and has been growing its backlog consistently. Notable recent contracts include one with Amazon to supply it with liquid hydrogen beginning in 2025. 

Financially, Bloom Energy is in even better stead as it expects to generate $1 billion in revenue this year and turn positive on operating cash flow. Bloom Energy's incredible customer profile, steady growth, and potential opportunities under the recently passed Inflation Reduction Act have compelled more analysts to pay closer attention to the stock, with many even turning bullish in recent weeks.

Hyzon Motors is the most speculative of the three stocks, what with the maker of hydrogen-powered trucks recently ousting its CEO after discovering accounting inefficiencies and delaying its quarterly earnings release.

Even if things turn for the worse and the economy slips into a recession, the global transition from fossil fuels to clean energy might slow down but won't stop. Green hydrogen is slowly but steadily emerging as a key part of the clean energy equation, and that means growth stocks like Bloom Energy and Plug Power could rebound quickly.