diff --git a/packages/jupyter-ai/jupyter_ai/chat_handlers/base.py b/packages/jupyter-ai/jupyter_ai/chat_handlers/base.py
index d3c4e497d..a60317209 100644
--- a/packages/jupyter-ai/jupyter_ai/chat_handlers/base.py
+++ b/packages/jupyter-ai/jupyter_ai/chat_handlers/base.py
@@ -289,6 +289,8 @@ def close_pending(self, pending_msg: PendingMessage):
             handler.broadcast_message(close_pending_msg)
             break
 
+        pending_msg.closed = True
+
     @contextlib.contextmanager
     def pending(self, text: str, ellipsis: bool = True):
         """
@@ -297,9 +299,10 @@ def pending(self, text: str, ellipsis: bool = True):
         """
         pending_msg = self.start_pending(text, ellipsis=ellipsis)
         try:
-            yield
+            yield pending_msg
         finally:
-            self.close_pending(pending_msg)
+            if not pending_msg.closed:
+                self.close_pending(pending_msg)
 
     def get_llm_chain(self):
         lm_provider = self.config_manager.lm_provider
diff --git a/packages/jupyter-ai/jupyter_ai/chat_handlers/default.py b/packages/jupyter-ai/jupyter_ai/chat_handlers/default.py
index e0d923e77..4aebdde80 100644
--- a/packages/jupyter-ai/jupyter_ai/chat_handlers/default.py
+++ b/packages/jupyter-ai/jupyter_ai/chat_handlers/default.py
@@ -97,29 +97,28 @@ async def process_message(self, message: HumanChatMessage):
         received_first_chunk = False
 
         # start with a pending message
-        pending_message = self.start_pending("Generating response")
-
-        # stream response in chunks. this works even if a provider does not
-        # implement streaming, as `astream()` defaults to yielding `_call()`
-        # when `_stream()` is not implemented on the LLM class.
-        async for chunk in self.llm_chain.astream(
-            {"input": message.body},
-            config={"configurable": {"session_id": "static_session"}},
-        ):
-            if not received_first_chunk:
-                # when receiving the first chunk, close the pending message and
-                # start the stream.
-                self.close_pending(pending_message)
-                stream_id = self._start_stream(human_msg=message)
-                received_first_chunk = True
-
-            if isinstance(chunk, AIMessageChunk):
-                self._send_stream_chunk(stream_id, chunk.content)
-            elif isinstance(chunk, str):
-                self._send_stream_chunk(stream_id, chunk)
-            else:
-                self.log.error(f"Unrecognized type of chunk yielded: {type(chunk)}")
-                break
-
-        # complete stream after all chunks have been streamed
-        self._send_stream_chunk(stream_id, "", complete=True)
+        with self.pending("Generating response") as pending_message:
+            # stream response in chunks. this works even if a provider does not
+            # implement streaming, as `astream()` defaults to yielding `_call()`
+            # when `_stream()` is not implemented on the LLM class.
+            async for chunk in self.llm_chain.astream(
+                {"input": message.body},
+                config={"configurable": {"session_id": "static_session"}},
+            ):
+                if not received_first_chunk:
+                    # when receiving the first chunk, close the pending message and
+                    # start the stream.
+                    self.close_pending(pending_message)
+                    stream_id = self._start_stream(human_msg=message)
+                    received_first_chunk = True
+
+                if isinstance(chunk, AIMessageChunk):
+                    self._send_stream_chunk(stream_id, chunk.content)
+                elif isinstance(chunk, str):
+                    self._send_stream_chunk(stream_id, chunk)
+                else:
+                    self.log.error(f"Unrecognized type of chunk yielded: {type(chunk)}")
+                    break
+
+            # complete stream after all chunks have been streamed
+            self._send_stream_chunk(stream_id, "", complete=True)
diff --git a/packages/jupyter-ai/jupyter_ai/models.py b/packages/jupyter-ai/jupyter_ai/models.py
index ea541568b..331f4cd94 100644
--- a/packages/jupyter-ai/jupyter_ai/models.py
+++ b/packages/jupyter-ai/jupyter_ai/models.py
@@ -103,6 +103,7 @@ class PendingMessage(BaseModel):
     body: str
     persona: Persona
     ellipsis: bool = True
+    closed: bool = False
 
 
 class ClosePendingMessage(BaseModel):