Cashin, Sonnenfeld Differ On The Dow's Tumble If Cohn Resigns

The Dow Jones Industrial Average lost nearly 300 points Thursday amid concerns that President Donald Trump's administration could see Gary Cohn resign as economic adviser.

If this scenario plays out, the reaction to stocks could be quite notable, although experts degree on the severity. Yale School of Management's Jeffrey Sonnenfeld told CNBC that if Cohn were to step down, the markets will "crash."

Cohn is a key member of Trump's team and is working hard on tax reform plans, Sonnenfeld said. As such, there is a lot of faith riding on Cohn, and his departure would mark the complete opposite of what investors are looking for from the White House.

But what if a member of Trump's team, not necessarily Cohn, resigns from the White House? It isn't beyond the realm of possibility that more than one member of Trump's team will leave, Art Cashin of UBS separately told CNBC on Friday. If this were to occur, the reaction on the DJIA would be a plunge to the downside of at least 500 points, and not necessarily in one day, Cashin said.

Investors have reason to be "encouraged" since the White House clearly shot down the possibility of Cohn leaving in a statement. Also, Vice President Mike Pence will be joining the President at Camp David on Friday, one day earlier than originally planned, and will offer his presence to Trump for the near-term.

"We can hope something good comes from that," Cashin said.

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