Cashin, Siegel: This is biggest China concern

Investors should be most concerned about about the yuan when weighing the situation in China, UBS' Art Cashin and longtime bull Jeremy Siegel said Thursday.

"They've lost a good deal on foreign exchange reserves. That's going to present a little bit of a problem for them," Cashin, the bank's director of floor operations, CNBC's "Squawk on the Street."

China's foreign exchange reserves fell by $512.66 billion in 2015 to $3.33 trillion, central bank data showed on Thursday. That marks their biggest annual drop. The People's Bank of China (PBOC) had set the yuan midpoint at 6.5646 per dollar on Thursday, 0.5 percent weaker than Wednesday's fix, the biggest fall between daily fixings since the devaluation began in mid-August.

"What this does is, again, push inflation on the rest of the world at a time when central bankers are struggling to get inflation up to its target. That's one reason why I think the Fed's going to stay its hands," Siegel, the finance professor at The Wharton School, told CNBC's "Fast Money: Halftime Report" on Thursday.

Chinese equities fell 7 percent for the second time this week, triggering the newly placed circuit breakers. In fact, the Chinese trading session only lasted 29 minuted before being shut down.

"They are just learning their way, and they set the circuit breakers too tight," John Rutledge, chief investment strategist at Sanafad, told CNBC's "Squawk Alley" on Thursday. "I think Chinese policymakers are going to throw everything they can onto this. They have already announced they are going to suspend the loosening of the right to sell securities that they tightened down on during the last drop in the market."

Still, Bob Doll, chief equity strategist of Nuveen Asset Management, has a much more sanguine view on China. "This feels to me a lot like August," he said. "[There are] a lot of similarities. Chinese authorities did something then; they'll do some things now."

"In the meantime, I think we have a U.S. consumer that is doing just fine."

Global markets followed China lower, with U.S. equities falling more than 2 percent. U.S. oil also hit $32.10 a barrel, its lowest levels since December 2003, before settling down 2 percent.

"$32 is a critical area. If it breaks $32, it might induce some extra selling because there are some derivative products that are linked to the $32 price, and you can see some of those weaken," Cashin said.

— Reuters contributed to this report.