The stock market is having a relief rally now that a "committee of professionals" will handle foreign investment concerns instead of President Donald Trump alone, closely followed trader Art Cashin told CNBC on Wednesday.

"Remember, the first word in CFIUS is committee," said Cashin, UBS director of floor operations at the New York Stock Exchange, referring to Committee on Foreign Investment in the United States.

Wednesday it won't be looking to block companies with 25 percent or more of Chinese ownership from buying certain U.S. tech-related firms, as reports had suggested earlier in the week. Instead, the government will rely on the newly strengthened CFIUS to deal with concerns.

Treasury Secretary told CNBC on Wednesday that all of Trump's advisors were unanimous on the decision, adding it was "unfortunate" if Wall Street got any mixed messages in the days leading up to the announcement.

"So that means more deliberative, that means more collegial, that means the gun is no longer in any one person's hands, including the president," Cashin told "Squawk on the Street."

Cashin continued, "The market looked at that [announcement] and said, 'Oh, it's going to be committee of professionals? Then we probably won't have the train run off the track.' And that's the kind of sigh of relief rally you're seeing here."

In trading Wednesday, U.S. stock futures and turned positive on the Chinese investment announcement, which was less restrictive than expected. Stocks later opened higher, with the Dow Jones Industrial Average up more than 200 points intraday.

However, Cashin warned that investors should be careful because "there are still signs around that we are going to see volatility into the end of the quarter and the end of the half."

"People waiting and rebalancing their positions. They're taking a look at where they're going," Cashin explained, adding he expects the rebalancing will be just as impactful on the market as trade concerns.