This thesis aims to build on existing research of market psychology and the effect of sentiment on financial markets. The main objective of this study is to determine the ability of investors to make rational decisions during the most recent period of high sentiment. The Efficient Market Hypothesis has been adopted by economists as a popular theory to navigate and explain the stock market. This hypothesis states that share prices reflect all information and trade at their fair price value. However, the anomalies that have occurred in the stock market can be better understood by market psychology which focuses on the biases and social factors that influence investors. The media are a newly relevant factor impacting the volume of sentiment present in the market. A review of the literature reveals that many studies of sentiment and financial markets indicate that emotion has a prominent influence on investors' decisions. The current pandemic has had detrimental effects on human life and livelihood. A unique economic situation has emerged as uncertainty increased, resulting in extreme volatility in financial markets that cannot be explained by mainstream financial theories and rational decision-making alone. This thesis expands on recent literature about the pandemic and attempts to understand the market movements by looking at a range of explanatory data reflecting panic, sentiment, and fake news in the media, alongside measures of fundamental economic conditions to assess irrational decisions during the pandemic. I will use these measures to test sentiment and the media's significance on the S&P500 and the 10-year treasury yield in the US for 2020 and 2021. This model identifies when sentiment has the most influence on investment decisions and how. Furthermore, I evaluate how investors treat the bond market differently from the stock market. I will also identify the effectiveness of irrational investors. The media generate a continuous flow of posts; however, financial news is updated far less frequently. My model assumes that rational investors, when making investment decisions, will take fundamental measures into consideration that are not released as frequently as general news. The fundamentals I will draw upon are especially relevant measures of the state of the economy during the pandemic. A few of these factors are unemployment (continued claims), banking tightness, the stock market volatility index, and the market price of crude oil. By evaluating the degree of misalignment between fundamentals and sentiment, I predict that decisions during the pandemic did not accurately reflect the condition of the economy. Understanding market psychology is crucial because it can deepen the comprehension of economic cycles and potentially be used to improve the productivity and growth of the entire economy.