Yes, extreme levels or prolonged periods of stress can cause your hair to stop growing and start shedding.
There are multiple causes for hair loss, some are attributed to side-effects from medications, diabetes, thyroid disorders, surgery and even extreme emotional stress.
Hair grows in repeating cycles. The active growth phase lasts about 2 years, followed by a 3-month resting phase (called the telogen phase), which is followed by shedding. The normal rate of shedding is about 100 strands of hair per day. However, when the body experiences extreme stress, as much as 70% of the hair on your head can prematurely enter the resting phase.
The hair loss may not be easily linked to the cause of the stress, due to the 3-months lag from the time the changes in your body are triggered to when your hair actually falls out. This type of hair loss (called telogen effluvium) is widespread, so the decrease in volume may not be easily noticeable, and usually no bald spots will develop.
Many people experience hair loss due to higher and prolonged levels of stress. If the conditions of extreme stress are not resolved and continue, then the thinning will become more apparent. Generally, when conditions improve, hair will start to re-grow within 6 months, and no medical treatment is necessary. If you’re unsure about the reason, your doctor can check for the underlying cause.