diff --git a/site/src/pages/AgentsPage/components/ChatConversation/StreamingOutput.stories.tsx b/site/src/pages/AgentsPage/components/ChatConversation/StreamingOutput.stories.tsx
index 62d6099565..60593bb61f 100644
--- a/site/src/pages/AgentsPage/components/ChatConversation/StreamingOutput.stories.tsx
+++ b/site/src/pages/AgentsPage/components/ChatConversation/StreamingOutput.stories.tsx
@@ -5,6 +5,7 @@ import {
 	buildLiveStatus,
 	buildReconnectState,
 	buildRetryState,
+	buildStreamRenderState,
 	FIXTURE_NOW,
 } from "./storyFixtures";
 
@@ -252,3 +253,28 @@ export const RetryStartupTimeout: Story = {
 		).not.toBeInTheDocument();
 	},
 };
+
+/**
+ * During streaming, if only tool-call blocks have arrived (no text
+ * or reasoning), the "Thinking..." indicator should still be visible
+ * alongside the tool cards.
+ */
+export const ThinkingDuringStreamingWithToolCalls: Story = {
+	args: {
+		...buildStreamRenderState([
+			{
+				type: "tool-call",
+				tool_name: "execute",
+				tool_call_id: "tc-1",
+				args: { command: "ls -la" },
+			},
+		]),
+	},
+	play: async ({ canvasElement }) => {
+		const canvas = within(canvasElement);
+		// "Thinking..." should still be visible during streaming
+		// when only tool-call blocks have arrived.
+		const matches = canvas.getAllByText("Thinking...");
+		expect(matches.length).toBeGreaterThanOrEqual(1);
+	},
+};
diff --git a/site/src/pages/AgentsPage/components/ChatConversation/StreamingOutput.tsx b/site/src/pages/AgentsPage/components/ChatConversation/StreamingOutput.tsx
index f83fbc34b2..e7b67a6847 100644
--- a/site/src/pages/AgentsPage/components/ChatConversation/StreamingOutput.tsx
+++ b/site/src/pages/AgentsPage/components/ChatConversation/StreamingOutput.tsx
@@ -1,17 +1,51 @@
 import type { FC } from "react";
 import type { UrlTransform } from "streamdown";
 import type * as TypesGen from "#/api/typesGenerated";
-import { ConversationItem, Message, MessageContent } from "../ChatElements";
+import {
+	ConversationItem,
+	Message,
+	MessageContent,
+	Response,
+	Shimmer,
+} from "../ChatElements";
 import { ChatStatusCallout } from "./ChatStatusCallout";
 import { BlockList } from "./ConversationTimeline";
 import type { LiveStatusModel } from "./liveStatusModel";
-import type { MergedTool, StreamState } from "./types";
+import type { MergedTool, RenderBlock, StreamState } from "./types";
 
 const hasTransientLiveStatus = (liveStatus: LiveStatusModel): boolean =>
 	liveStatus.phase === "starting" ||
 	liveStatus.phase === "retrying" ||
 	liveStatus.phase === "reconnecting";
 
+/**
+ * True when the block list contains at least one text or reasoning
+ * block. Tool-call and other non-text blocks don't count because
+ * they don't replace the "Thinking..." placeholder visually.
+ */
+const hasTextOrReasoningBlock = (blocks: readonly RenderBlock[]): boolean =>
+	blocks.some((b) => b.type === "response" || b.type === "thinking");
+
+/**
+ * Stateless "Thinking..." shimmer used during the streaming phase
+ * when no text or reasoning blocks have arrived yet. Unlike the
+ * `StartingPlaceholder` in `ChatStatusCallout`, this has no
+ * delayed-startup timer — the streaming phase is transient and
+ * will be replaced as soon as real content arrives.
+ */
+const StreamingThinkingPlaceholder: FC = () => (
+	<div className="relative">
+		<Response aria-hidden className="invisible select-none">
+			Thinking...
+		</Response>
+		<div className="pointer-events-none absolute inset-0 flex items-baseline gap-2">
+			<Shimmer as="div" className="text-[13px] leading-relaxed">
+				Thinking...
+			</Shimmer>
+		</div>
+	</div>
+);
+
 export const StreamingOutput: FC<{
 	streamState: StreamState | null;
 	streamTools: readonly MergedTool[];
@@ -40,13 +74,25 @@ export const StreamingOutput: FC<{
 	const isStreaming = liveStatus.phase === "streaming";
 	const shouldShowBlocks =
 		liveStatus.phase === "streaming" || liveStatus.hasAccumulatedOutput;
-	const shouldShowStatusCallout = hasTransientLiveStatus(liveStatus);
+	const blocks = shouldShowBlocks ? (streamState?.blocks ?? []) : [];
+
+	// During streaming, keep showing the "Thinking..." indicator
+	// until text or reasoning blocks arrive. This bridges the
+	// visual gap between the "starting" phase placeholder and the
+	// first visible content, preventing the indicator from
+	// flickering away when only tool-call parts (or whitespace-
+	// only text deltas) have been received so far.
+	const needsStreamingThinking =
+		isStreaming && !hasTextOrReasoningBlock(blocks);
+
+	const shouldShowStatusCallout =
+		hasTransientLiveStatus(liveStatus) || needsStreamingThinking;
+
 	if (!shouldShowBlocks && !shouldShowStatusCallout) {
 		return null;
 	}
 
 	const conversationItemProps = { role: "assistant" as const };
-	const blocks = shouldShowBlocks ? (streamState?.blocks ?? []) : [];
 
 	return (
 		<ConversationItem {...conversationItemProps}>
@@ -66,7 +112,8 @@ export const StreamingOutput: FC<{
 								mcpServers={mcpServers}
 							/>
 						)}
-						{shouldShowStatusCallout && (
+						{needsStreamingThinking && <StreamingThinkingPlaceholder />}
+						{!needsStreamingThinking && hasTransientLiveStatus(liveStatus) && (
 							<ChatStatusCallout
 								status={liveStatus}
 								startingResetKey={startingResetKey}
diff --git a/site/src/pages/AgentsPage/components/ChatConversation/chatStore.createStore.test.ts b/site/src/pages/AgentsPage/components/ChatConversation/chatStore.createStore.test.ts
index 99c009e52a..738eb4f49f 100644
--- a/site/src/pages/AgentsPage/components/ChatConversation/chatStore.createStore.test.ts
+++ b/site/src/pages/AgentsPage/components/ChatConversation/chatStore.createStore.test.ts
@@ -616,13 +616,24 @@ describe("selectIsAwaitingFirstStreamChunk", () => {
 		expect(selectIsAwaitingFirstStreamChunk(store.getSnapshot())).toBe(false);
 	});
 
-	it("returns false during pending status even when stream state is null", () => {
+	it("returns true during pending status when latest message is from user", () => {
 		const store = createChatStore();
 		store.setChatStatus("pending");
 		store.upsertDurableMessage(makeMessage(1, "user", "hello"));
 
-		// "pending" should NOT be treated as awaiting because the
-		// transport drops message_part events during pending status.
+		// "pending" with a user message as latest means the user
+		// just submitted and is waiting for the server to start.
+		expect(selectIsAwaitingFirstStreamChunk(store.getSnapshot())).toBe(true);
+	});
+
+	it("returns false during pending status when latest message is from assistant", () => {
+		const store = createChatStore();
+		store.setChatStatus("pending");
+		store.upsertDurableMessage(makeMessage(1, "user", "hello"));
+		store.upsertDurableMessage(makeMessage(2, "assistant", "calling tool"));
+
+		// "pending" with an assistant message as latest means a
+		// tool-call cycle is in progress, not a fresh user send.
 		expect(selectIsAwaitingFirstStreamChunk(store.getSnapshot())).toBe(false);
 	});
 
@@ -675,4 +686,18 @@ describe("selectIsAwaitingFirstStreamChunk", () => {
 		// "Thinking..." should appear immediately.
 		expect(selectIsAwaitingFirstStreamChunk(store.getSnapshot())).toBe(true);
 	});
+
+	it("returns true when WS delivers user message + status:pending (fresh send)", () => {
+		const store = createChatStore();
+		// Simulate the WS batch: [message(user), status:pending].
+		// This is the exact event order from the server when the
+		// user sends a message. "Thinking..." must appear during
+		// the pending phase so there is no visual gap before the
+		// server transitions to running.
+		store.upsertDurableMessage(makeMessage(1, "user", "sweet ty"));
+		store.setChatStatus("pending");
+		store.clearStreamState();
+
+		expect(selectIsAwaitingFirstStreamChunk(store.getSnapshot())).toBe(true);
+	});
 });
diff --git a/site/src/pages/AgentsPage/components/ChatConversation/chatStore.ts b/site/src/pages/AgentsPage/components/ChatConversation/chatStore.ts
index 0b5821df10..6619fc1224 100644
--- a/site/src/pages/AgentsPage/components/ChatConversation/chatStore.ts
+++ b/site/src/pages/AgentsPage/components/ChatConversation/chatStore.ts
@@ -551,17 +551,26 @@ export const selectIsAwaitingFirstStreamChunk = (
 	const latestMessage = selectLatestDurableMessage(state);
 	const latestMessageNeedsAssistantResponse =
 		!latestMessage || latestMessage.role !== "assistant";
-	// Only treat "running" as awaiting a first chunk. During "pending"
-	// status the transport drops incoming message_part events
-	// (shouldApplyMessagePart returns false), so streamState can never
-	// transition away from null. Including "pending" here caused the
-	// "Response startup is taking longer than expected" warning to
-	// fire spuriously during multi-turn tool-call cycles.
-	return (
-		state.streamState === null &&
-		state.chatStatus === "running" &&
-		latestMessageNeedsAssistantResponse
-	);
+	// Show the "Thinking..." indicator when the store has no stream
+	// data yet and the conversation is waiting for an assistant
+	// response. For "running" status we use the existing broad
+	// check (any non-assistant latest message). For "pending" we
+	// restrict to the case where the latest message is explicitly
+	// a user message — this covers the fresh-send flow (user just
+	// submitted and the server hasn't started streaming yet) while
+	// avoiding a spurious indicator during multi-turn tool-call
+	// cycles, where the latest durable message is a tool result
+	// and the assistant response is still being assembled.
+	if (state.streamState !== null || !latestMessageNeedsAssistantResponse) {
+		return false;
+	}
+	if (state.chatStatus === "running") {
+		return true;
+	}
+	if (state.chatStatus === "pending" && latestMessage?.role === "user") {
+		return true;
+	}
+	return false;
 };
 
 export const useChatSelector = <T>(
diff --git a/site/src/pages/AgentsPage/components/ChatConversation/streamState.test.ts b/site/src/pages/AgentsPage/components/ChatConversation/streamState.test.ts
index ee8ae55cb5..b11984f90a 100644
--- a/site/src/pages/AgentsPage/components/ChatConversation/streamState.test.ts
+++ b/site/src/pages/AgentsPage/components/ChatConversation/streamState.test.ts
@@ -72,6 +72,22 @@ describe("applyMessagePartToStreamState", () => {
 		expect(result).toBe(prev);
 	});
 
+	it("returns prev for text part with whitespace-only text", () => {
+		const result = applyMessagePartToStreamState(null, {
+			type: "text",
+			text: "   ",
+		});
+		expect(result).toBeNull();
+	});
+
+	it("returns prev for reasoning part with whitespace-only text", () => {
+		const result = applyMessagePartToStreamState(null, {
+			type: "reasoning",
+			text: "  \n\t  ",
+		});
+		expect(result).toBeNull();
+	});
+
 	it("creates tool call entry from tool-call part", () => {
 		const result = applyMessagePartToStreamState(null, {
 			type: "tool-call",
diff --git a/site/src/pages/AgentsPage/components/ChatConversation/streamState.ts b/site/src/pages/AgentsPage/components/ChatConversation/streamState.ts
index d51b333240..8602c89981 100644
--- a/site/src/pages/AgentsPage/components/ChatConversation/streamState.ts
+++ b/site/src/pages/AgentsPage/components/ChatConversation/streamState.ts
@@ -21,7 +21,10 @@ export const applyMessagePartToStreamState = (
 
 	switch (part.type) {
 		case "text": {
-			if (!part.text) {
+			// Skip empty and whitespace-only deltas so they don't
+			// create a non-null StreamState with empty blocks, which
+			// would prematurely end the "starting" phase.
+			if (!part.text?.trim()) {
 				return prev;
 			}
 			return {
@@ -30,7 +33,7 @@ export const applyMessagePartToStreamState = (
 			};
 		}
 		case "reasoning": {
-			if (!part.text) {
+			if (!part.text?.trim()) {
 				return prev;
 			}
 			return {