Impending tariffs on aluminum may be more of a concern among market players than steel, said Art Cashin, UBS director of floor operations at the New York Stock Exchange.
"The market is worried about the capricious nature of what happened today," Cashin said Thursday on CNBC's "Closing Bell." And aluminum tariffs are disconcerting for investors, "because it involves Canada, right at the time the NAFTA talks are falling apart," he said.
The Dow Jones Industrial Average rallied in early trading Thursday, only to plunge more than 550 points later in the day after President Donald Trump said steel and aluminum tariffs would go into effect as early as next week. The Dow recovered slightly to end down 1.7 percent, or 420.22 points, at 24,608.98. The S&P 500 also declined 1.3 percent. The worst-performing sector was industrials.
Cashin estimates that approximately 30 to 35 percent of Thursday's sell-off is from aluminum stocks.
Also a concern, Cashin said, was the potential for trade wars and "poisoning relationships in major trading partners."
Currently, the Trump Administration is in its seventh round of talks with Canada and Mexico over the future of the North American Free Trade Agreement. The accord, which came into effect in 1994 under former President Bill Clinton, establishes a free trade zone among the U.S., Canada and Mexico.
The tariffs would be 25 percent on steel and 10 percent on aluminum, Trump said. The administration will apply the tariffs broadly, without targeting specific countries, and not impose quotas.