Goals from Kasey Palmer and Elias Kachunga, in the 14th and 62nd minutes respectively, ensured Town bounced back from their midweek defeat at Brighton and ended the day two points clear of second-placed Norwich.
Substitute Idrissa Sylla pulled a goal back 14 minutes from time but it was not enough to prevent Jimmy Floyd Hasselbaink's side slipping to a second consecutive defeat.
Norwich came from a goal behind to beat Nottingham Forest 2-1 at the City Ground to move up to second.
Apostolos Vellios made the visitors pay for missing a penalty in the 34th minute, when Wes Hoolahan failed to score from 12 yards, but Norwich responded after half-time through goals from Jonny Howson and Graham Dorrans.
Newcastle wasted the chance to keep the pressure on the leaders as an own goal from Chancel Mbemba was added to by Helder Costa to earn Wolves an impressive 2-0 triumph at St James' Park, where Vurnon Anita was sent off late on for a bad foul on Ivan Cavaleiro.
Barnsley also slipped up, losing 2-1 to 10-man Reading at Oakwell following first-half goals from Gareth McCleary, who was also sent off, and John Swift, meaning Adam Armstrong's late effort was nothing more than a consolation.
Lukas Jutkiewicz netted an injury-time winner as Birmingham moved up to fifth with a 2-1 win over Sheffield Wednesday at St Andrew's.
After Clayton Donaldson's penalty cancelled out Gary Hooper's 76th-minute opener, Jutkiewicz headed home Jacques Maghoma's cross to secure the win for Birmingham.
A Scott Hogan hat-trick, a Harlee Dean effort and an own goal from Chris Humphrey helped Brentford hammer struggling Preston 5-0.
At the other end of the table, Blackburn secured their first win of the season at the eighth attempt with a 4-2 triumph over fellow strugglers Rotherham at Ewood Park.
Goals from Craig Conway, Marvin Emnes, Ben Marshall and Sam Gallagher secured victory after Danny Ward had fired the visitors into a 12th-minute lead with the first of his brace.
Leeds secured a second successive win on former Swansea manager Garry Monk's return to south Wales, beating Cardiff 2-0 courtesy of Chris Wood's penalty and a superb goal from Pablo Hernandez.
Aaron Wilbraham came off the bench to net a stoppage-time equaliser and salvage a 1-1 draw for Bristol City against Derby, who scored only their second league goal of the season through Ikechi Anya, at Ashton Gate.
Brighton won 1-0 at Burton following Tomer Hemed's 88th-minute penalty, while the games involving Ipswich and Aston Villa at Portman Road and Wigan and Fulham at the DW Stadium ended goalless.