Panama (2-0-1, seven points) holds a two-goal advantage over the second-place United States (1-0-1, four points), which needs to defeat last-place Nicaragua (0-2-0) by at least three goals on Saturday to finish atop Group B. Martinique fell to 1-2-0.
Panama had won its match vs. Martinique, 3-0, earlier on Saturday.
Heading into the match, the U.S. MNT needed to win by three or more goals to take first place in the group and avoid a quarterfinal matchup with Costa Rica.
Next up will be the third-place finisher from either Group A or Group C, with Honduras finishing third in Group A. Group C will complete play Sunday night, with Mexico taking on Curaçao and Jamaica facing El Salvador.
In many ways, the USA men's national soccer team did not deserve to finish atop Group B in the CONCACAF Gold Cup.
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Coach Bruce Arena had planned all along to use nearly everyone on the 23-man roster in the group stage, and in the last match, he swapped out every starter from Wednesday's anxious performance against Martinique. They weren't in danger of conceding a goal, but they weren't exactly threatening to smash the 13th-best team in CONCACAF, according to FIFA's rankings.
Alejandro Bedoya surged on the right flank and crossed to the top of the penalty area. Kelyn Rowe finished off a USMNT attack shortly before the hour mark to extend the lead for the tournament hosts. Dwyer's penalty, unfortunately for the USMNT, was saved. Jordan Morris played the hero, though, as he came through with the game-winner in the 75th minute.
Nicaragua's Luis Copete was sent off in the 85th minute to leave his side shorthanded in the waning minutes.