Art Cashin said fears of deflation and an "economic pause, particularly coming out of Europe" continue to put downward pressure on bond yields, and those yields are then pressuring stocks.
Cashin, UBS' director of floor operations at the NYSE, told CNBC's Bob Pisani around midday that the 10-year U.S. note yield is being closely watched by traders. "The 2.5 percent has become a new trick now. Above 2.5 percent the pressure eases on stocks. Below 2.5 percent they start to sell again... That's the deflation concept and we'll wait to see what the ECB (European Central Bank) does in its June meeting."
—By CNBC's Alex Crippen. Follow him on Twitter @alexcrippen.