Traders are trying to remain positive as stocks came off their sharp morning lows, veteran trader Art Cashin told CNBC on Wednesday.
"If we rolled over here and violated the morning lows, then it would really begin to be a problem," said Cashin, UBS director of floor operations at the New York Stock Exchange. "For now, everybody is kind of crossing their fingers and whistling past the graveyard, saying, 'OK, we tested Monday's lows,'" he added, around midmorning as the worst of the sell-off was abating.
At the low of the session, around 9:45 a.m. ET on Wednesday, the S&P 500 sank about 56 points, or nearly 2%, to 2,825, stopping less than 4 points away from Monday's worst level of the day. On Monday, the S&P 500 had its worst day of the year, just weeks after closing at a record high.
"The S&P held, so I guess we can be in good shape," said Cashin, who predicted rocky markets for the next few weeks as global trade tensions mount. "I think volatility is here to stay."
This week's volatility was sparked by concerns over the impact on global economic growth from the escalating trade dispute between Washington and Beijing.
China on Monday said it would potentially put tariffs on U.S. agricultural products and it was halting new purchases.
The central bank in China also on Monday allowed its currency to slide to more than 10-year lows. It came back and let it strengthen some Tuesday and then kind of split the difference Wednesday.
The moves were in retaliation for President Donald Trump's threat to add 10% tariffs on $300 billion worth of Chinese goods. If those duties do go into effect on Sept. 1 as planned, basically all imports from China would be covered.