Just bought the game recently. But I am having a HUGE issue where my mouse keeps going upwards out of the screen. This issue disappears when I open the menu. But when I try to scroll down he settings the settings scroll back up again for some reason. And once I exit the menu the problem comes back.

Any idea how to fix this?

Sounds like you have a controller or other gamepad plugged in.

Try going in settings and turning gamepad to force off. If you can't because it scrolls back up:

Go to %appdata%\stardewvalley
Right click default_options and open with notepad
Ctrl+F > gamepad

Change <gamepadMode>Auto</gamepadmode> to
<gamepadMode>ForceOff</gamepadmode>

Manually changing didnt work. But since the cursor worked fine when the menu was open, and the option for gamepad mode was at the top (i.e. I didnt need to scroll down, which was giving me issues as well), I managed to change it from game.