U.S. markets are being driven by the fall in oil, despite the Federal Reserve hinting at a December rate hike, Art Cashin said Thursday.
"When [oil] hit those lows this morning, it crushed the opening rally in stocks and took the Dow down to minus 50. They recovered when oil kind of stabilized," Cashin, UBS' director of floor operations at the New York Stock Exchange, told CNBC's "Power Lunch."
U.S. stocks have traded in a narrow range for most of Thursday's session despite opening higher. WTI crude settled down 2.42 percent.
"It's back to that relationship about the economy in general and oil stocks and energy stocks," he said.
Cashin added that the Fed is not a driving factor because most of the traders at the NYSE — as well as himself — do not believe the economic data are supportive for a Fed rate hike.
Nonetheless, Fed Chair Janet Yellen and New York Fed President William Dudley both said Wednesday that December was a "live possibility" for raising rates if the data are supportive.
Atlanta Fed President Dennis Lockhart said Thursday the case for a December rate increase would strengthen in the next few weeks as investors and the central bank digest more data.
Some of the economic data to come out this week include private companies adding 182,000 jobs in October, according to ADP, and U.S. layoffs falling 14 percent month over month, according to Challenger, Gray & Christmas.
On Friday, however, investors will digest the Labor Department's nonfarm payrolls report for October. Cashin said a big miss could bring about a rally in the stock market.