Steve Bruce’s side took the lead in the first half through Sean Longstaff’s stunning strike – his first in 14 months.
Chances were squandered before Ismaila Sarr equalised for the hosts on 72 minutes.
The Hornets celebrated a winner, that was until VAR ruled out Josh King’s goal for offside.
Substitute Jacob Murphy went one-on-one with Ben Forster in the final seconds of the match but his chipped attempt was read by the goalkeeper.
Our man Miles Starforth was at Vicarage Road – and he has dished out his Newcastle player ratings:
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5. Matt Ritchie - 7
Linked well with Joelinton on the left, nothing much got past him at left-back. Photo: Stephen Pond
6. Isaac Hayden - 6
Returned to midfield after a stint in a five-man defence, sat in front of the back four all afternoon. Photo: Alex Morton
7. Sean Longstaff - 8
Ended a 14-month run without a league goal with a stunning strike from more than 20 yards, used the ball well. Photo: Alex Morton
8. Joe Willock - 6
Passed fit to play after initially being ruled out with a toe injury, looked in discomfort at one point, but played on until late in the game. Photo: Alex Morton