Despite a bright start, the Black Cats fell a goal down in the 17th minute when defender Christian Kabesle headed home a corner.
Sunderland were then undone by another set-piece, as Ryan Porteous headed in another corner midway through the second half.
The hosts did manage to pull a goal back immediately when Luke O’Nien converted from close range in the 70th minute, before Patrick Roberts scored an excellent equaliser in stoppage-time.
Here’s how Phil Smith rated the Sunderland players against Watford:
9. Amad - 6
Some wonderful touches at times but just wasn't quite able to find his best quality in the final third. Was inches away from getting away what could have been a vital effort in stoppage time. 6 Photo: Frank Reid
10. Jack Clarke - 6
Started very brightly and caused Watford all sorts of problems. Faded and looked frustrated for much of the second half but finished strongly and showed excellent composure to tee up Roberts. 6 Photo: Martin Swinney
11. Joe Gelhardt - 5
Started brightly and had one or two really good touches, but struggled to really make an impact after Watford got the goal and were able to drop deep and defend. 5 Photo: Frank Reid
12. Alex Pritchard (sub) - 6
It was his shot that O’Nien turned home to keep his side in the contest, and brought some urgency in possession. 6 Photo: Frank Reid