Cashin: 10-year Treasury yield could be a market 'trip wire'

Markets are closely following 10-year Treasurys and if the key U.S. government bonds reach a certain yield it could be a "trip wire" for markets, with the potential to blunt buying in equities, said Art Cashin, director of floor operations at UBS Financial Services.

"Traders are concerned that the area between 2.95 and 3 percent might be a trip wire. It used to be closer to 2.91, but we're inching up and I think we're very close to it. If it hits, it'd be interesting to see if it causes the bids to disappear in equity," Cashin told "Squawk on the Street" Thursday.

The yield on the 10-year briefly topped 3 percent late Thursday. (Click here to see where the 10-year Treasury is trading now)

Geopolitical uncertainty, specifically in Syria, is moving markets together, with equities keying off of movement in the gold and oil markets. This week, a delayed decision from Washington on military action moved commodity, government bond, and equity markets, but Cashin said that this reaction may be an overreaction to the ebbs and flows of the situation.

(Related: Factory growth buoys shares as Syria risk eases)

"People may be overstating what the fears are, but you've got to wait until you see it," Cashin explained. Regardless, news of a delayed decision in Syria caused investors to abandon the "flight to safety" trade.

(Related: Oil boosted as US politicians inch toward Syria consensus)

However, when asked whether the Dow Jones Industrial Average would drop on an attack in Syria, Cashin said "it might well," based upon whether there is a spillover that affects the broader region. "That's why you've seen these habitual flights to safety, flutters to safety, if you will," he said.

—By CNBC's Paul Toscano. Follow him on Twitter @ToscanoPaul and get the latest stories from "Squawk on the Street"