The north Londoners needed only a point to reclaim fourth spot from Chelsea but conceded three times before half-time.

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, who were promoted last year, moved into seventh spot -- a position that could offer a route into European football next season.

Arsenal have now lost two matches in a row following Sunday's home defeat by Crystal Palace and they may need the backup option of winning the Europa League to claim a place in next season's Champions League.

Emery remained confident they can finish in the top four.

"We can be frustrated but the Premier League is about being consistent over 38 matches," the Spaniard said.

"Today we're disappointed but we need to remember how we were three months ago.

"We can be optimistic and recover for the top four."

Australian Associated Press