U.S. stock markets are beginning to feel pain from shifting dynamics in the Brexit talks and trade tensions with China as investors wait and see how things play out, veteran trader Art Cashin told CNBC on Monday.

"It's Christmas time and Santa's making up lists. Well, so are the investors," Cashin, UBS director of floor operations at the New York Stock Exchange, said on "Squawk Alley." "Unfortunately, their lists are things to worry about."

Markets reacted negatively early Monday to British Prime Minister Theresa May's delay of a vote in Parliament on her deal for the United Kingdom to leave the European Union. The major indexes were seesawing later in the day.

In midafternoon trading, the Dow Jones Industrial Average was down a little more than 20 points, while the had fallen around 2 points. The Nasdaq Composite was up 40 points.

"I think [Brexit is] going to weigh on us. We're starting to see global trade and global markets beginning to slip, and we're still talking tariffs and a variety of other things," Cashin said. "So we'll wait and see how that works out all the way."

Cashin added that banks are feeling a double whammy from a Brexit deal that is "potentially disruptive" and a flattening Treasury yield curve that "certainly got their attention."

SPDR S&P Bank ETF was down more 2.2 percent at midafternoon. Shares of J.P. Morgan Chase, Citigroup and Morgan Stanley were all down more than 2 percent. Goldman Sachs was down 1 percent.

Transportation stocks, on the other hand, are on the decline as a result of the tariffs that President Donald Trump has put on China, Cashin said.

Trump and Chinese President Xi Jinping agreed to a 90-day truce to halt the trade war as they negotiate an agreement, but the transportation sector is now reeling after companies worked to "get ahead of the tariffs" before they went into effect by importing more and building their inventories, Cashin said.

That resulted, he said, in "strong economic reports" earlier this year and the effects are beginning to bleed into the market.

"And now that is stopping and slowing and we're starting to see the response to it," he said.

Chinese economic reports are showing that the country's exports are down, but Cashin said that's not because of American companies are doing less business with China.

"No, it's not down with the U.S. yet. [Their exports are] down with Europe," he said. "So we're beginning to see some of this stuff move around."