Researchers at Harvard University put mice through mild pain, restraint, and psychological stress and watched their fur lose color, fastest after pain, then traced the cause to the nerve supply around hair follicles.
Ya-Chieh Hsu's team found that stress activates sympathetic nerves near hair follicles, flooding the area with noradrenaline. That surge permanently depleted the follicle's melanocyte stem cells, the small reserve of pigment-producing cells that color each new hair, in mice exposed to any of the three stress types tested.
Cutting the sympathetic nerve supply to a patch of skin, or blocking noradrenaline's downstream signal, stopped the stress-induced graying in those mice. The mechanism differs from ordinary age-related graying, which depletes the same stem cells more slowly over a lifetime. Whether the same nerve pathway drives hair loss of color in people has not been directly shown.

Read the original study
Zhang et al., Nature, 2020 · doi.org/10.1038/s41586-020-1935-3
The stem cells burn out, not just fade.
Source
- Zhang, B., Ma, S., Rachmin, I., He, M., Baral, P., Choi, S., Gonçalves, W. A., Shwartz, Y., Fast, E. M., Su, Y., Zon, L. I., Regev, A., Buenrostro, J. D., Cunha, T. M., Chiu, I. M., Fisher, D. E., & Hsu, Y.-C. (2020). Hyperactivation of sympathetic nerves drives depletion of melanocyte stem cells. Nature, 577(7792), 676–681. https://doi.org/10.1038/s41586-020-1935-3