European giants Real Madrid and Manchester City faced humbling defeats in Tuesday's Champions League action.

Defending champions Madrid fell 3-1 to AC Milan at home, while Manchester City watched a promising start unravel.

Erling Haaland’s missed penalty and an early lead weren’t enough, as City ultimately succumbed 4-1 to Sporting Lisbon, whose coach is set to take over City’s crosstown rival.

Liverpool, however, enjoyed a stellar night at Anfield.

Luis Diaz netted a hat trick, with Cody Gakpo adding another in a commanding 4-0 victory over German champion Bayer Leverkusen, marring Xabi Alonso’s return to his former club.

The Leverkusen coach received a warm welcome on his return to the club where he became a fan favorite as a player over five seasons between 2004 and 2009.

Alonso won the Champions League with Liverpool in 2005.

Liverpool moved to the top of the league phase table with four wins from four games, followed by Sporting and Monaco, both with 10 points after three wins and a draw.

Under the new 36-team format introduced by UEFA this season, the top eight teams advance directly to the next round, while teams from ninth to 24th enter playoffs to reach it; the bottom 12 are eliminated.

Before their game, Sporting fans displayed a massive tifo thanking Ruben Amorim in his last home game before he takes over Manchester United.

Phil Foden got City off to a flying start in the fourth minute, only the second goal Sporting has conceded in four games in the competition.

But Swedish forward Viktor Gyokeres scored a hat trick as Sporting came roaring back.

Gyokeres first equalized in the 38th minute after a perfect through ball from Geovany Quenda, before Maximiliano Araujo made it 2-1 right after the break.

Gyokeres then made it 3-1 from the penalty spot after Josko Gvardiol was penalized for a shove on Francisco Trincao in the area.

Haaland’s penalty hit the crossbar before Gyokeres showed the Norwegian how it’s done with another spot kick at the other end to complete the scoring.

It is the first time since 2018 that City has lost three straight games, coming off a defeat to Tottenham in the English League Cup and a loss to Bournemouth in the Premier League.

"In my seven and a half years at the club, I don't remember losing three games in a row," City midfielder Bernardo Silva said.

In Spain, Christian Pulisic sent in a corner for Malick Thiaw to head Milan into a 12th-minute lead, ensuring Madrid trailed in a third straight game in the Champions League this season. The 15-time champion had already lost to surprise team Lille in its second game.

Vinicius Junior equalized from the penalty spot in the 23rd after he’d been tripped, but Alvaro Morata pounced on the rebound after Andriy Lunin saved Rafael Leao’s shot to restore the visitors’ lead against his former club.

Morata received a hostile reception from the home fans, who evidently remember the goal he scored to take Juventus through to the 2015 final at their team’s expense.

Tijjani Reijnders scored Milan’s third goal as the home fans voiced their frustrations at Santiago Bernabéu Stadium.

"The last two defeats are inexplicable. We have to analyze and react quickly," Lunin said, referring to Madrid's 4-0 loss to Barcelona in its previous Spanish league game.

It's the first time since 2009 that Madrid has lost two successive games at home with at least three goals conceded in each, according to Opta.

"We have to get back on track," Lunin said.

German forward Nicolas Kühn scored twice as Celtic defeated Leipzig 3-1 at home, and Juventus drew 1-1 at Lille.

Lille midfielder Edon Zhegrova eluded two defenders before playing a perfect pass for Jonathan David, who fired inside the far post, but Dusan Vlahovic equalized with a penalty for the Italian club.

Donyell Malen scored late for Borussia Dortmund to beat Sturm Graz 1-0 at home, and Thilo Kehrer did likewise for Monaco, which won 1-0 at Bologna.

United States midfielder Malik Tillman scored one goal and set up another as PSV Eindhoven beat Spanish team Girona 4-0.

Dinamo Zagreb dealt Slovan Bratislava its fourth straight defeat in the competition as the visitors came from behind to win 4-1 in Bratislava.