Why is all text in all caps?

When you tried

Ctrl+Shift+Y (Windows)

or

Cmd+Shift+Y (Mac)

did you have the text highlighted?

text highlighted

after pressing

Ctrl+Shift+Y (Windows)

or

Cmd+Shift+Y (Mac)

What

Ctrl+Shift+Y (Windows)

or

Cmd+Shift+Y (Mac)

does is return the type to the default font style.

It's not the shortcut to toggle All Caps on/off.

Try this:

Restore default preferences
Preference settings control how Photoshop Elements Editor displays images, cursors, and transparencies, saves files, uses plug‑ins and scratch disks, and so on. If the application exhibits unexpected behavior, the preferences file could be damaged. You can restore all preferences to their defaults.

Note: Deleting the preferences file is an action that cannot be undone.

Do one of the following:

Press and hold Alt+Control+Shift (Mac: Option+Command+Shift) immediately after Photoshop Elements begins launching. Click Yes to delete the Adobe Photoshop Elements settings file.
Go to Edit > Preferences (Mac: Photoshop Elements > Preferences > General), click the Reset Preferences on next launch button, and then click OK. When you restart Adobe Photoshop Elements, all preferences are reset to default settings.
A new preferences file is created the next time you start Photoshop Elements Editor. For information on a specific preference option, search for the preference name in Help.

from here:

https://helpx.adobe.com/photoshop-elements/kb/preference-file-locations-photoshop-elements.html

What operating system are you using?

Can you post a screenshot of what your seeing including the Tool Options for the Type Tool?

Try this:

https://www.morehawes.ca/uk/technology/computing/getting-text-back-from-all-caps-in-photoshop-elements-not-caps-lock/comment-page-2

It may be a font that is only caps.

Try a different font.