It appears that John has
transformed one finger into a blade in order to stab Sarah in the shoulder. (We can see the wound on Sarah's shoulder in later scenes.) This is somewhat different from the way the Skynet Terminator transforms John; the Terminator presses its hand into John's face and an orange glow appears around its fingers.
This has the effect of
immobilising and weakening her, and distracting Reese and Pops. As John explains, he can't kill Sarah, because if he does, Pops will be free to detonate the explosives and destroy them all. But he certainly can hurt her. (This is also a probable homage to a scene at the end of Terminator 2, in which the T-1000 similarly stabs Sarah in the shoulder.)
In later scenes,
Sarah does not appear any different, so it seems John was unwilling or unable to transform her into a Terminator like himself.
That said, the end of the movie telegraphs quite blatantly that there is going to be a sequel, so the incident in question may have some sort of delayed effect on Sarah.