He might be really hurt. Naruto has always been an outcast and being called a demon again could reopen old wounds. So he could just stand there in shock and disbelief, his eyes wide with pain.
Naruto could get angry. He has worked so hard to be accepted and for Sakura to call him a demon could make him lash out. He might start shouting at her, asking how she could say such a thing after all they've been through together.
She might be really hurt and start to question her self - worth. Maybe she becomes more withdrawn and less confident in herself.
He could also get angry. After all, being misjudged like that is unfair. His anger could lead him to either lash out verbally at Sakura or he could leave the village in a fit of rage, feeling that he is not accepted even by his friends. This could then lead to a series of events where Naruto has to find his own way and Sakura realizes her mistake later on.
She may feel angry at first. Sakura is a strong - willed character. She might think that Naruto has made this decision without considering her feelings. In the fanfic, she could go on a rant about how he should have talked to her before making such a big decision.
It might also cause Naruto to lose control more easily. If he hears such a hurtful term from someone he cares about like Sakura, it could make him more vulnerable to the Nine - Tails' influence. In the long run, it could be a turning point in his character development, either making him more bitter or more determined to show everyone, including Sakura, that he's not what she says.
Sakura would likely be devastated. Naruto has been her friend and teammate for a long time. His death would leave a huge void in her life, and she'd probably go through a long period of mourning.
Sakura might initially be confused. She would probably wonder why Naruto is acting this way all of a sudden. For example, she might try to get his attention by calling his name a few times, but when he doesn't respond, she could be left feeling a bit bewildered.
Sakura might react by being more assertive around Naruto. Instead of being shy or holding back, she could be more forward in showing her friendship or even her deeper feelings. She may also try to intimidate the fangirls in a way, like using her strength as a ninja to show that she is not one to be trifled with.
At first, Naruto would likely be extremely shocked. He has always considered Sakura a friend and teammate, so this would be a huge blow. He might question his own judgment in trusting her.
Sakura might initially be confused. She has known Naruto for a long time and his sudden coldness would be unexpected. She may try to reach out to him to find out what's wrong.
One possible reason could be that Naruto has some sort of new power that seems menacing or uncontrollable to Sakura at that moment. Maybe it's a power he got unexpectedly and it has some sort of dark or wild aspect to it that makes her blurt out 'demon'.