U.S. stocks plunged on Friday, but things could have been much worse, closely followed trader Art Cashin told CNBC.
"We were very close to having a potential bloodbath on the close," Cashin said Friday on "Closing Bell."
While the Dow Jones industrial average ultimately ended 572.46 lower, at one point it was down as much as 767.02 points.
Cashin, UBS director of floor operations at the New York Stock Exchange, said at one point that during that low "the indication was for well over $1 billion for sale on the bell. Luckily that pared off."
Had it come to fruition, Cashin said, stocks "would have closed in a very ugly fashion, probably on the lows of the day."
Fears of a potential trade war weighed on the market as the conflict between the U.S. and China appeared to escalate. After China announced new tariffs on 106 U.S. products Wednesday, President Donald Trump threatened $100 billion in additional tariffs against China.
China's Commerce Ministry said Friday the country will not hesitate to react with a "major response" to the new U.S. tariffs.
"You're getting a heightened degree of nervousness, not full panic quite yet," Cashin said.
He expects the market to be "jumpy" for several days because "both sides want to declare victory."
China President Xi Jinping "wants to say he's protecting the Chinese people from the trading aggression of the United States and Mr. Trump wants to say very much the same thing on the other side," Cashin said.
However, he said there may be some "big help" early next week when Xi is expected to give a big speech. Everyone will be watching to see if he wades into the trade issue and where things may go from there, Cashin said.
— CNBC's Fred Imbert contributed to this report.