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Bernardo Silva scored twice as Manchester City beat Watford 3-1
Manchester City and Liverpool took advantage of Chelsea's 3-2 defeat at West Ham on Saturday to climb above Thomas Tuchel's side in the three-way race for the Premier League title.
Defending champions City ended the day on top of the table for the first time this season after a 3-1 stroll at struggling Watford, following Liverpool's last-gasp 1-0 win at Wolves.
Elsewhere, Newcastle won for the first time in the league to clamber off the bottom of the table and give new manager Eddie Howe hope they can survive.
Chelsea went into their early match at the London Stadium as Premier League leaders, with just one defeat to their name this season.
The European champions led twice, through a Thiago Silva header and Mason Mount's spectacular volley, but they were pegged back both times, by a penalty from Manuel Lanzini and Jarrod Bowen's strike.
And with three minutes remaining substitute West Ham defender Arthur Masuaku, lurking out on the left wing, swung a speculative effort towards the Chelsea goal, deceiving Edouard Mendy as it arched past the stunned goalkeeper.
"So, was it a cross or was it shot," Masuaku asked on Twitter. "(Hint: I was as surprised as you)."
Tuchel bemoaned Chelsea's individual errors and the "freak goal" that led to their defeat.
"We hate to lose, we have to digest it now," he told the BBC. "It is not a performance to be mad about, but in detail we need to be better again.
"If we won the game nobody would have given us the title and if we lose it I don't think anybody else gets it this weekend."
The result meant David Moyes's West Ham, who had already ended Liverpool's long unbeaten run this season, consolidated their place in the top four.
Liverpool left it until deep into stoppage time to see off tenacious Wolves, with substitute Divock Origi finishing from Mohamed Salah's pass in the 94th minute.
The visitors dominated possession at Molineux and had 17 shots on goal but Wolves battled hard to keep them at bay before Origi's late intervention.
"Divock Origi, the legend, finished it off and it's a great story," Klopp told Sky Sports. "He's an incredible striker. For different reasons he did not play that often but I hope one day he finds a manager that plays him more than I do.
"He's one of the best finishers I've ever seen in my life."
City, chasing a fourth Premier League title in five years, kicked off at Watford in the evening fixture knowing a win would take them top and they dominated their struggling hosts.
Raheem Sterling put Pep Guardiola's side ahead early and two goals from Bernardo Silva ended the contest despite a late consolation for Cucho Hernandez.
"A really good performance," the City boss told Sky Sports. "We missed a lot of chances -- hopefully next time we'll convert more.
"The game should be over quicker. We are in the routine that we're consistent in the way we play. In football the most difficult thing is to put the ball in the net. But the way we played was really good again."
City now have 35 points after their fifth consecutive league win, one point clear of Liverpool and two ahead of Chelsea.
Earlier, Newcastle scrambled a vital 1-0 win against fellow-strugglers Burnley to move within three points of safety when Callum Wilson took advantage of an error from visiting goalkeeper Nick Pope.
Howe said he was confident the team could stay up despite a testing run of fixtures, adding that the January transfer window would be crucial.
"They are hungry and want to achieve," he said. "For sure we can stay up. We have come in from a difficult position and there is a long road ahead but I believe in what we are doing."
Brighton's Neal Maupay scored in the 98th minute to earn his side a 1-1 draw against Southampton.
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