In a scrappy affair where eight yellow cards were handed out, City took the lead 35 minutes in when winger Jack Grealish found Josko Gvardiol with a pass and the full back skilfully turned Dan Burn before firing in at the bottom corner.
Newcastle struck back in the 58th minute when Anthony Gordon went one-on-one with City goalkeeper Ederson, who conceded a penalty when he tripped him. The England international scored from the spot to level the game at 1-1.
City stay provisionally top with 14 points from six games as they wait for Liverpool, Aston Villa and Arsenal to play their games, while Newcastle are fifth with 11 points.