Investors also digested key economic data released Thursday.
Weekly jobless claims totaled 236,000, matching estimates, while the so-called core personal consumption expenditures increased 1.4 percent in July on a year-over-year basis, the smallest gain since December 2015. The core PCE is the Federal Reserve's preferred measure of inflation, and it's lagging the central bank's 2 percent target.
"That's a terrible number if you're looking for inflation," said Mary Ann Hurley, vice president of fixed income trading at D.A. Davidson. "The Fed has a dual mandate: a labor mandate and an inflation mandate."
"I think these low inflation prints are going to keep the Fed on hold," Hurley said.
Market expectations for a December rate hike were just 31 percent on Thursday, according to the CME Group's FedWatch tool.
Treasury yields fell after the inflation data were released. The benchmark 10-year note yield traded at 2.133 percent, while the two-year yield traded near 1.33 percent.
Other economic data released Thursday included pending home sales, which fell 0.8 percent in June. The data deluge comes a day ahead of the Bureau of Labor Statistics' monthly employment report, which is scheduled for release on Friday at 8:30 a.m. ET.
Overseas, stocks got a boost from strong economic data. In Europe, the Stoxx 600 index rose 0.8 percent after euro zone inflation hit 1.5 percent on a year-over-year basis in August, marking the highest rate in four months. Asian stocks closed mostly higher overnight after China's official manufacturing PMI topped expectations.
The positive overseas data followed strong economic numbers out of the U.S. On Wednesday, the U.S. government said the economy grew at an annualized rate of 3.0 percent on an annualized basis, above the expected gain rate of 2.7 percent.