Investors are worried about the yield curve too, which often indicates a recession. But some bond investors say the inversion of the 3 year and 5 year treasury yields isn't that scary. It's the inversion of the 3 month and 10 year yields that would be really bad. Also, not every yield curve inversion precedes a recession by a just a few months.
As for stocks, Consumer staples will be interesting to watch, as they can act as defensive stocks in a rough economy.