Art Cashin said stocks ended at the day's lows with a Dow drop of more than 300 points because traders were worried some countries might use the weekend to adjust their currencies.
A few minutes before trading ended for the day, Cashin, UBS' director of floor operations at the NYSE, told CNBC's Closing Bell that "ordinarily Friday is the best day of the week—shorts tend to cover going into a weekend—but this is different because today we're worried about currencies. And nations use weekends to adjust their currencies. They usually do it on a Sunday when no one's around." As a result, traders wanted to reduce their risk and they did that by selling.
He added, "The bulls will have to do a lot of work to get things back to order. There's some serious damage."
Cashin predicted next week will be "critical" as the Federal Reserve holds its regular policy-making meeting. He believes there will be a lot of discussion about reducing the pace of the central bank's tapering to avoid further disrupting the markets.