The fact that cyclical stocks — including consumer discretionary, industrials and financials — managed to grind higher after getting beaten up suggests short covering is at least partly behind the rally, he said.
Shares also got a boost from surging crude futures, which extended gains after Iran's oil minister said the country supports a plan floated this week by fellow producers Saudi Arabia, Russia, Venezuela and Qatar to freeze output at January levels.
While U.S. crude rose above the critical $30-per-barrel mark, it is important that the commodity proves it can hold those gains, Cashin said. Few people believe talks between OPEC members and non-OPEC producers to stem oil price losses will ultimately be fruitful, he said.
Barry Bannister, chief equity strategist at Stifel Nicolaus, said Wednesday on "Squawk on the Street" that a freeze would not be particularly helpful because it caps production near maximum output. Further, he said he worries about supply from the "Shiite axis" of Iran and Iraq.
Both Iran and Iraq have ramped up production and are politically aligned against top oil exporter Saudi Arabia, the predominant Sunni Muslim power in the region.