Wall Street concerns about "unforeseen consequences" from another Federal Reserve interest rate hike were keeping a lid on Tuesday's stock market rebound, according to veteran trader Art Cashin.

Against the backdrop of higher rates, investors are "very nervous" about global economic growth slowing and uncertainty around the U.S. trade war with China, said the UBS director of floor operations at the New York Stock Exchange. "They don't know how much built-in tolerance for rate hikes there are. This is more than the normal amount of nervousness," he added.

Cashin appeared on CNBC's "Squawk on the Street" on Tuesday as the Dow Jones Industrial Average was up more than 1 percent in midday trading. He said the Dow appeared to be meeting intraday resistance at around 23,900.

The Dow was bouncing off a two-session plunge of more than 4 percent amid fears that the Fed's path for higher rates could be too much for the economy and market to handle.

The central bank is expected to raise rates for a fourth time this year at the conclusion of its two-day December policy meeting Wednesday. The Dow, as of Monday's close, was having its worst December performance since 1980, and was on pace for its worst December start since the Great Depression.

Cashin said there are several investors on the sidelines ahead of the Fed rate increase decision. He added the amount of pushback on the Fed hike, including from President Donald Trump, is "borderline historical."

Earlier this month, Cashin said he was "quite doubtful" of the three rate hikes that central bankers had projected for 2019 after their September meeting. The market expects a more scaled-back rate path Wednesday.