"It's a mild warning signal, to tell you the truth," Cashin told "Squawk Alley." "When we've seen those kinds of moves before, the market has either stalled or actually pulled back somewhat. Not anything climactic, but you could be setting up for [a] 5 to 7 percent pullback."
Cashin, UBS director of floor operations at the New York Stock Exchange, said that the lows could have come from political anxiety among investors relating to President Donald Trump's recent accusation that his predecessor had his Trump Tower phones tapped during the campaign.
"The president tweeting about the supposed wiretapping and whatnot took some of the goodwill that popped up after the speech [to Congress] last week," and replaced it with "the fear that we could go into partisan political warfare all over again," Cashin said.
"I would be a little cautious," he warned.
And although the market typically discounts Trump's sometimes inflammatory tweets, Cashin said this reaction was different because it showed a reversal to some of Trump's less favorable habits.
"It was kind of a new and demonstrably different reaction because if you recall going after the speech and into the big rally on Wednesday, the feeling was, 'Gee, maybe this administration is going to be able to get some things done,'" Cashin recalled.
Instead, the accusations brought into question "the 'orderly transfer of power' idea that we have that makes the democracy work so well," Cashin said, spurring an anxious market reaction.
As for health-care stocks, Cashin said they will need some time to sort through the Republicans' Obamacare replacement bill.
"[There's] going to be a lot of heavy duty play down there in Washington around this," he said. "It will take a good deal of attention."