Any government crackdown on Facebook will be felt across Silicon Valley and Wall Street, closely followed trader Art Cashin told CNBC on Tuesday.

"Price appreciation, tech represents about 40 to 45 percent of the value of the overall market," said Cashin, UBS director of floor operations at the New York Stock Exchange. Additionally, if the government should "crack down in a regulatory fashion, that could have some difficulties not just for Facebook but for people like Google and others," Cashin told "Squawk on the Street."

Facebook stock fell Tuesday after a report said the Federal Trade Commission is investigating whether the use of personal data from Facebook users by political analysis firm Cambridge Analytica violated a consent decree the tech company signed with the agency.

Moreover, Facebook CEO Mark Zuckerberg was summoned Tuesday by British lawmakers to give evidence related to the company's links to Cambridge Analytica, which worked on Facebook ads for President Donald Trump's campaign.

Despite investors' fears about Facebook, U.S. stocks climbed higher Tuesday, with the Dow Jones industrial average up more than 100 points. Cashin said the market is benefiting from something called the "Fed drift" ahead of the Federal Reserve policy statement Wednesday.

"If it's a two-day meeting, the day before and the morning of the second day, prices on stocks tend to drift up a little bit," Cashin explained. He also said the stock market appears to be "checking its own conditions."

The market suffered a "mild heart attack" on Tuesday, when the Dow fell more than 335 points, Cashin said. Now, the market wants to see "how's my temperature, how's my pulse, how do I feel, can I walk more than a block away?"