Stocks sharply lower, but trim losses as Fed's Mester pours cold water on 75 basis point hike

U.S. stocks remained on track for the biggest one-day drop since early March, but came off session lows after Cleveland Federal Reserve Bank President Loretta Mester said she didn't see a need for a 75 basis point rate hike. In a CNBC interview, Mester said she would prefer a "methodical approach" rather than the "shock" of a 75 basis point move, explaining that she would be comfortable with more than one 50 basis point rise in an effort to get the fed funds rate to 2.5% by the end of the year. The Dow Jones Industrial Average was down 746 points, or 2.1%, at 34,048, after falling 893 points at its session low ahead of Mester's remarks. The S&P 500 was down 2.2%, on track for its largest one-day drop since March 7, according to FactSet.

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