Champions Manchester United suffered a 3-0 thrashing at Fulham on Saturday to remain three points adrift of Chelsea in the Premier League title race.
Goals by Danny Murphy, Bobby Zamora and Damien Duff condemned United to their second league defeat in eight days and Chelsea can stretch their lead to six if they beat struggling West Ham United on Sunday.
Another surprising day in England's top flight began with Liverpool's 2-0 loss at bottom club Portsmouth, their seventh league defeat this season.
Third-placed Aston Villa moved to within two points of United with a 1-0 home win over Stoke City and Tottenham Hotspur won 2-0 at Blackburn Rovers to return to the top four.
Manchester City edged a cracker against Sunderland at Eastlands, winning 4-3 for only their second victory in 11 league matches although speculation about the future of manager Mark Hughes rumbled on.
A costly defeat for second-placed United began on 22 minutes when midfielder Murphy seized possession from Paul Scholes before firing past goalkeeper Tomasz Kuszczak from long range.
Immediately after the restart, in-form striker Zamora met a Clint Dempsey knockdown to half volley past Kuszczak and double Fulham's lead with his 10th goal of the season.
DUFF VOLLEY
United manager Alex Ferguson threw Dimitar Berbatov and Danny Welbeck on in a three-pronged attack alongside Wayne Rooney but a superb Damien Duff volley with 15 minutes remaining sealed an emphatic victory for the hosts.
Under pressure City boss Hughes watched his side move up to sixth place after finishing on top in a goal fest against a Sunderland side reduced to 10 men late on at Eastlands.
Craig Bellamy set up Roque Santa Cruz for City's opener and Cruz's first league goal for the club, before winning a penalty which Carlos Tevez scored to go 2-0 up inside 12 minutes.
Soon after Sunderland drew level through defender John Mensah and a rocket from Jordan Henderson, only for the impressive Bellamy to curl home on 35 minutes.
The goals continued after the break when substitute striker Kenwyne Jones's header hauled Sunderland level on the hour only for Cruz to grab his second with 20 minutes remaining.
Earlier, Liverpool slumped to a seventh league defeat of the season with a 2-0 defeat at bottom-club Portsmouth thanks to superb strikes from Nadir Belhadj and Frederic Piquionne.
A header from Norwegian frontman John Carew sealed a 1-0 victory for Aston Villa over 11th-placed Stoke City, while Tottenham Hotspur moved up to fourth with a 2-0 win at Blackburn Rovers thanks to a Peter Crouch double.
Results
Aston Villa 1 Stoke City 0
Blackburn Rovers 0 Tottenham Hotspur 2
Fulham 3 Manchester United 0
Manchester City 4 Sunderland 3
Portsmouth 2 Liverpool 0