Trackpad and keyboard freeze after sleep mode

I have a Macbook air (apple M1 chip) running Monterey 12.4. Every time I close the laptop or it goes to sleep mode the laptop freezes. Only thing to do is hold the button to shut down and start up again. It works fine once I start up again but freezes after sleep mode.

I tried starting in the safe mode and it didn't help. I created a new user account and it had the same problem. I reinstalled the operating system and that did not solve the problem. Any ideas?