"Something's happened to the administration over the course of the last few weeks," he added, pointing to the departure of former National Economic Council Director Gary Cohn and President Donald Trump 's repeated attacks on Amazon as well as the protectionist rhetoric.

"It's basically saying we don't like protectionism," the chief economist and co-founder of UCX said on " Closing Bell. "

The market action over the last two days "has been a big warning signal to Washington," veteran trader Jack Bouroudjian told CNBC on Thursday.

U.S. stocks closed higher on Thursday, extending their two-day rebound rally. The Dow Jones industrial average ended more than 200 points higher, a day after wild trading saw the blue-chip index drop about 500 points and then rally more than 700 points from that session low.

Fueling the volatility is concern over a possible trade war between the United States and China.

On Wednesday, China announced fresh tariffs on 106 U.S. products, including cars, whiskey and soybeans — less than 24 hours after the U.S. administration issued a list of Chinese imports that it would target.

However, administration officials have moved to quell those fears. On Wednesday, National Economic Council Director Larry Kudlow told reporters it's "possible" the proposed tariffs on China may not actually take effect. He said Trump wants to solve this "with the least amount of pain."

Bouroudjian credited those words for Wednesday's turnaround, calling it the "Larry Kudlow rally."

Kenny Polcari, director at O'Neil Securities, agreed Kudlow's response, along with Commerce Secretary Wilbur Ross downplaying the effect of the tariffs, "absolutely put a floor in the market."

However, he noted that there was extremely low trading volume on Thursday, which tells him a lot of big asset managers are sitting out of the market right now. That creates "exaggerated moves," he said.

While traders see opportunity in volatility, Polcari reminded long-term investors to "eliminate that noise and continue to focus on their portfolio."

Meanwhile, Bouroudjian has concerns about the fact that China owns $1.17 trillion in U.S. Treasury bonds. If China decides to sell some of its holdings, many fear it could have dire consequences. On Thursday, former Morgan Stanley Asia chair Stephen Roach told CNBC it could cause a "rout" in the bond market.

And that's not all. Bouroudjian said no one is really talking about how China has $2 trillion in sovereign wealth fund money.

"They have a big stick. We have never fought a trade war with that much power behind the people we are fighting against. So we have to be very, very careful what we're asking for here," he said.

— CNBC's Fred Imbert contributed to this report.

Disclaimer