President Donald Trump's signing of a major tax overhaul bill will distort the so-called Santa Claus rally, closely followed trader Art Cashin told CNBC on Tuesday.

Stocks opened lower Tuesday, four days after Trump signed the Republicans' tax bill into law, which included lowering the corporate tax rate to 21 percent from 35 percent.

The Santa Claus rally often occurs in the last week of December through the first two trading days of January.

"The tax bill threw a lot of things off," Cashin said in an interview on "Squawk on the Street." "People didn't necessarily do the kind of ... selling they're used to. They didn't know what kind of rules would apply, so they kind postponed some of that."

"That may be what is going to distort the Santa Claus rally," said Cashin, UBS director of floor operations at the New York Stock Exchange.

He also said he witnessed something particularly interesting after the GOP voted to approve its tax bill.

"Just as it was passing, we saw the largest takedown in bond funds and in stock ETFs that we've seen all year. So I don't know whether that was some kind of year-end planning or not. But it's a little disturbing going into the period when you think you're going to have a massive rally," Cashin said.

Regarding the markets' performance in 2018, he said it is shaping up to be "absolutely wonderful."

"Corporations will have theoretically greater earnings without needing to do higher revenues and higher sales," Cashin said. "So, I'm wondering maybe we should be looking over our left shoulder if something geopolitical may be a surprise."