Three second-half goals saw Norwich to a comprehensive 3-0 victory at Brentford on Tuesday.
Norwich have made a fine start to the campaign following their relegation from the Premier League last season.
And they have now been rewarded with top spot after seven matches thanks to Alexander Tettey's 68th-minute strike, which was followed up by a quick-fire Cameron Jerome double.
Yet Watford prospered in his absence, Matej Vydra's 68th-minute penalty enough to overcome crisis club Blackpool, who are second-bottom without a win.
Solskjaer's days in Cardiff could be limited after the Welsh club crashed to back-to-back defeats, beaten 1-0 by Middlesbrough.
The Norwegian's future was cast into doubt following Cardiff's 4-2 defeat to Norwich on Saturday, having led 2-0 at half-time.
And Solskjaer is expected to be the subject of much debate yet again after Kike's goal two minutes in was enough to give Middlesbrough the points and leave Cardiff winless in four games.
Simon Cox's brace inspired Reading to a 3-2 victory at home to Millwall, who had overturned a two-goal deficit before the Republic of Ireland international netted the match-winning goal six minutes from time.
Elsewhere, Brighton's indifferent start to the season continued after they were beaten 2-0 by Ipswich Town.
