Stones was shown a second yellow card on 82 minutes, when the referee judged a coming together with Daniel Gazdag to be a bookable offence.
It looked incredibly harsh on the City defender and capped a miserable evening in the Midlands for Gareth Southgate’s team who were second best for much of the game.
Stones and Kyle Walker started the game at Molineux, but neither could prevent the visitors’ opening goal, a superb volley from Roland Sallai on 16 minutes, as the Three Lions’ awful Nations League campaign continued.
Raheem Sterling was introduced at half-time but couldn’t affect the game as England players looked jaded and bereft of ideas.
Phil Foden made a welcome return to action on 68 minutes following illness, but the Hungarians doubled their advantage just two minutes later.
Kalvin Phillips was dispossessed outside his own half by Adam Lang whose low cross was turned in by the impressive Sallai who bagged his second of the evening.
Further goals from Zsolt Nagy and Daniel Gazdag either side of Stones’ dismissal wrapped up England’s heaviest loss for 12 years.
Ilkay Gundogan enjoyed a far happier evening.
City’s Premier League title hero scored his 15th international goal as Germany thrashed Roberto Mancini’s Italy 5-2.
The City midfielder, winning his 60th cap for his country, doubled Die Mannschaft’s advantage from the penalty spot four minutes into first-half added time.
Joshua Kimmich, Thomas Muller, and Timo Werner (2) were also on the scoresheet before the Azzurri pulled two late consolation goals back.
Elsewhere, Ukraine came from behind to draw 1-1 with Republic of Ireland.
Played in Lodz, Poland, Oleksandr Zinchenko played the full 90 minutes, picking a yellow card up along the way.
The hosts fell behind to a Nathan Collins goal on 31 minutes but levelled after the break through Artem Dovbyk.
Kevin De Bruyne was released early from Belgium’s squad in order to have a much-needed break and so missed the 1-0 victory over Poland.
And Nathan Ake was not involved in Holland’s dramatic 3-2 win over Wales which saw the Welsh equalise in added time, only for Memphis Depay to score a minute later to snatch victory.