The yield on the short-term note hit a high of 3.516%, the highest level since November 2007, at one point Thursday. That's more than double the dividend yield of the S&P 500, according to Bespoke Investment Group. It was last trading about 6 basis points higher at 3.512%.
Yields move inversely to prices, and a basis point is equal to 0.01%.
Yesterday, a jobs report from payroll processing company ADP showed U.S. private payrolls grew by 132,000 in August, a deceleration from 268,000 in July.
ADP's chief economist, Nela Richardson, said it could show the U.S. at an inflection point, moving from "super-charged job gains to something more normal."
Markets are closely watching data releases amid fears of an economic slowdown in the U.S., after Federal Reserve Chair Jerome Powell said it may be necessary to cause pain to the economy in order to bring down inflation. Other Fed officials have also expressed hawkish sentiment this week.
U.S. stock market averages have seen losses in all four sessions since Powell's speech Friday, and had their worst August in seven years.
Gold prices have fallen to a six-week low on a stronger dollar.
Weekly U.S. jobless claims fell to 232,000 for the week ending Aug. 27, showing a decline of 5,000 from the previous period and the lowest level since June 25, the Labor Department reported Thursday. Economists surveyed by Dow Jones expected 245,000. Investors are still looking ahead to the Bureau of Labor Statistics' nonfarm payrolls report on Friday.
— CNBC's Jeff Cox contributed to this report.