Arsenal needed only a point to reclaim fourth spot from Chelsea but conceded three times before the break.
Unai Emery’s side were stunned as Wolves recovered from a slow start to take the lead with a stunning Ruben Neves free kick before Matt Doherty headed a second in the 37th minute.
It got even worse for Arsenal in first-half stoppage time as they carelessly gave the ball away in midfield and Diogo Jota surged through to fire a shot past Bernd Leno.
A late Sokratis header from Granit Xhaka’s cross was scant consolation for the Gunners fans who had made the trip to the Midlands.
With three games left, Arsenal remain in fifth place, a point behind Chelsea and four behind third-placed Tottenham Hotspur.
Wolves moved into seventh spot — a position that could offer a route into European football next season. (Reuters/NAN)