Nuno Espirito Santo's side took the lead in the 15th minute as left-back Jonny slipped a pass to Diogo Jota, whose low strike deflected in off Jamaal Lascelles.
Wolves then won the ball deep inside Newcastle's half and Jonny found 19-year-old Academy graduate Morgan Gibbs-White, who bent the ball home from the edge of the box.
Jota doubled his tally five minutes before the break, dispossessing Isaac Hayden in the Magpies' box and firing past Karl Darlow.
Wolves got a late fourth goal when Thomas Allan headed the ball into his own net from a corner.
The Magpies' new head coach Steve Bruce could take charge of that match, taking the reins from Academy head of coaching Ben Dawson and Under-23s head coach Neil Redfearn.
Wednesday 17 July, Nanjing Olympic Sports Center
Newcastle 0-4 Wolves
Man City 4-1 West Ham
Saturday 20 July, Hongkou Football Stadium, Shanghai
Newcastle v West Ham, third/fourth place playoff, kick-off 17:00 (10:00 BST)
Wolves v Man City, final, kick-off 19:30 (12:30 BST)