diff --git a/packages/cli/src/ui/utils/MarkdownDisplay.tsx b/packages/cli/src/ui/utils/MarkdownDisplay.tsx
index b3e88d9a01..29a857f3e0 100644
--- a/packages/cli/src/ui/utils/MarkdownDisplay.tsx
+++ b/packages/cli/src/ui/utils/MarkdownDisplay.tsx
@@ -4,7 +4,7 @@
  * SPDX-License-Identifier: Apache-2.0
  */
 
-import React from 'react';
+import React, { useMemo } from 'react';
 import { Text, Box } from 'ink';
 import { theme } from '../semantic-colors.js';
 import { colorizeCode } from './CodeColorizer.js';
@@ -28,6 +28,14 @@ const CODE_BLOCK_PREFIX_PADDING = 1;
 const LIST_ITEM_PREFIX_PADDING = 1;
 const LIST_ITEM_TEXT_FLEX_GROW = 1;
 
+const headerRegex = /^ *(#{1,4}) +(.*)/;
+const codeFenceRegex = /^ *(`{3,}|~{3,}) *(\w*?) *$/;
+const ulItemRegex = /^([ \t]*)([-*+]) +(.*)/;
+const olItemRegex = /^([ \t]*)(\d+)\. +(.*)/;
+const hrRegex = /^ *([-*_] *){3,} *$/;
+const tableRowRegex = /^\s*\|(.+)\|\s*$/;
+const tableSeparatorRegex = /^\s*\|?\s*(:?-+:?)\s*(\|\s*(:?-+:?)\s*)+\|?\s*$/;
+
 const MarkdownDisplayInternal: React.FC<MarkdownDisplayProps> = ({
   text,
   isPending,
@@ -39,282 +47,284 @@ const MarkdownDisplayInternal: React.FC<MarkdownDisplayProps> = ({
   const isAlternateBuffer = useAlternateBuffer();
   const responseColor = theme.text.response ?? theme.text.primary;
 
-  if (!text) return <></>;
+  const contentBlocks = useMemo(() => {
+    if (!text) return [];
 
-  // Raw markdown mode - display syntax-highlighted markdown without rendering
-  if (!renderMarkdown) {
-    // Hide line numbers in raw markdown mode as they are confusing due to chunked output
-    const colorizedMarkdown = colorizeCode({
-      code: text,
-      language: 'markdown',
-      availableHeight: isAlternateBuffer ? undefined : availableTerminalHeight,
-      maxWidth: terminalWidth - CODE_BLOCK_PREFIX_PADDING,
-      settings,
-      hideLineNumbers: true,
-    });
-    return (
-      <Box paddingLeft={CODE_BLOCK_PREFIX_PADDING} flexDirection="column">
-        {colorizedMarkdown}
-      </Box>
-    );
-  }
-
-  const lines = text.split(/\r?\n/);
-  const headerRegex = /^ *(#{1,4}) +(.*)/;
-  const codeFenceRegex = /^ *(`{3,}|~{3,}) *(\w*?) *$/;
-  const ulItemRegex = /^([ \t]*)([-*+]) +(.*)/;
-  const olItemRegex = /^([ \t]*)(\d+)\. +(.*)/;
-  const hrRegex = /^ *([-*_] *){3,} *$/;
-  const tableRowRegex = /^\s*\|(.+)\|\s*$/;
-  const tableSeparatorRegex = /^\s*\|?\s*(:?-+:?)\s*(\|\s*(:?-+:?)\s*)+\|?\s*$/;
-
-  const contentBlocks: React.ReactNode[] = [];
-  let inCodeBlock = false;
-  let lastLineEmpty = true;
-  let codeBlockContent: string[] = [];
-  let codeBlockLang: string | null = null;
-  let codeBlockFence = '';
-  let inTable = false;
-  let tableRows: string[][] = [];
-  let tableHeaders: string[] = [];
-
-  function addContentBlock(block: React.ReactNode) {
-    if (block) {
-      contentBlocks.push(block);
-      lastLineEmpty = false;
+    // Raw markdown mode - display syntax-highlighted markdown without rendering
+    if (!renderMarkdown) {
+      const colorizedMarkdown = colorizeCode({
+        code: text,
+        language: 'markdown',
+        availableHeight: isAlternateBuffer
+          ? undefined
+          : availableTerminalHeight,
+        maxWidth: terminalWidth - CODE_BLOCK_PREFIX_PADDING,
+        settings,
+        hideLineNumbers: true,
+      });
+      return [
+        <Box
+          key="raw-markdown"
+          paddingLeft={CODE_BLOCK_PREFIX_PADDING}
+          flexDirection="column"
+        >
+          {colorizedMarkdown}
+        </Box>,
+      ];
     }
-  }
 
-  lines.forEach((line, index) => {
-    const key = `line-${index}`;
+    const lines = text.split(/\r?\n/);
+    const blocks: React.ReactNode[] = [];
+    let inCodeBlock = false;
+    let lastLineEmpty = true;
+    let codeBlockContent: string[] = [];
+    let codeBlockLang: string | null = null;
+    let codeBlockFence = '';
+    let inTable = false;
+    let tableRows: string[][] = [];
+    let tableHeaders: string[] = [];
+
+    function addBlock(block: React.ReactNode) {
+      if (block) {
+        blocks.push(block);
+        lastLineEmpty = false;
+      }
+    }
+
+    lines.forEach((line, index) => {
+      const key = `line-${index}`;
+
+      if (inCodeBlock) {
+        const fenceMatch = line.match(codeFenceRegex);
+        if (
+          fenceMatch &&
+          fenceMatch[1].startsWith(codeBlockFence[0]) &&
+          fenceMatch[1].length >= codeBlockFence.length
+        ) {
+          addBlock(
+            <RenderCodeBlock
+              key={key}
+              content={codeBlockContent}
+              lang={codeBlockLang}
+              isPending={isPending}
+              availableTerminalHeight={
+                isAlternateBuffer ? undefined : availableTerminalHeight
+              }
+              terminalWidth={terminalWidth}
+            />,
+          );
+          inCodeBlock = false;
+          codeBlockContent = [];
+          codeBlockLang = null;
+          codeBlockFence = '';
+        } else {
+          codeBlockContent.push(line);
+        }
+        return;
+      }
+
+      const codeFenceMatch = line.match(codeFenceRegex);
+      const headerMatch = line.match(headerRegex);
+      const ulMatch = line.match(ulItemRegex);
+      const olMatch = line.match(olItemRegex);
+      const hrMatch = line.match(hrRegex);
+      const tableRowMatch = line.match(tableRowRegex);
+      const tableSeparatorMatch = line.match(tableSeparatorRegex);
+
+      if (codeFenceMatch) {
+        inCodeBlock = true;
+        codeBlockFence = codeFenceMatch[1];
+        codeBlockLang = codeFenceMatch[2] || null;
+      } else if (tableRowMatch && !inTable) {
+        if (
+          index + 1 < lines.length &&
+          lines[index + 1].match(tableSeparatorRegex)
+        ) {
+          inTable = true;
+          tableHeaders = tableRowMatch[1].split('|').map((cell) => cell.trim());
+          tableRows = [];
+        } else {
+          addBlock(
+            <Box key={key}>
+              <Text wrap="wrap" color={responseColor}>
+                <RenderInline text={line} defaultColor={responseColor} />
+              </Text>
+            </Box>,
+          );
+        }
+      } else if (inTable && tableSeparatorMatch) {
+        // Skip separator
+      } else if (inTable && tableRowMatch) {
+        const cells = tableRowMatch[1].split('|').map((cell) => cell.trim());
+        while (cells.length < tableHeaders.length) {
+          cells.push('');
+        }
+        if (cells.length > tableHeaders.length) {
+          cells.length = tableHeaders.length;
+        }
+        tableRows.push(cells);
+      } else if (inTable && !tableRowMatch) {
+        if (tableHeaders.length > 0 && tableRows.length > 0) {
+          addBlock(
+            <RenderTable
+              key={`table-${blocks.length}`}
+              headers={tableHeaders}
+              rows={tableRows}
+              terminalWidth={terminalWidth}
+            />,
+          );
+        }
+        inTable = false;
+        tableRows = [];
+        tableHeaders = [];
+
+        if (line.trim().length > 0) {
+          addBlock(
+            <Box key={key}>
+              <Text wrap="wrap" color={responseColor}>
+                <RenderInline text={line} defaultColor={responseColor} />
+              </Text>
+            </Box>,
+          );
+        }
+      } else if (hrMatch) {
+        addBlock(
+          <Box key={key}>
+            <Text dimColor>---</Text>
+          </Box>,
+        );
+      } else if (headerMatch) {
+        const level = headerMatch[1].length;
+        const headerText = headerMatch[2];
+        let headerNode: React.ReactNode = null;
+        switch (level) {
+          case 1:
+          case 2:
+            headerNode = (
+              <Text bold color={theme.text.link}>
+                <RenderInline
+                  text={headerText}
+                  defaultColor={theme.text.link}
+                />
+              </Text>
+            );
+            break;
+          case 3:
+            headerNode = (
+              <Text bold color={responseColor}>
+                <RenderInline text={headerText} defaultColor={responseColor} />
+              </Text>
+            );
+            break;
+          case 4:
+            headerNode = (
+              <Text italic color={theme.text.secondary}>
+                <RenderInline
+                  text={headerText}
+                  defaultColor={theme.text.secondary}
+                />
+              </Text>
+            );
+            break;
+          default:
+            headerNode = (
+              <Text color={responseColor}>
+                <RenderInline text={headerText} defaultColor={responseColor} />
+              </Text>
+            );
+            break;
+        }
+        if (headerNode) addBlock(<Box key={key}>{headerNode}</Box>);
+      } else if (ulMatch) {
+        const leadingWhitespace = ulMatch[1];
+        const marker = ulMatch[2];
+        const itemText = ulMatch[3];
+        addBlock(
+          <RenderListItem
+            key={key}
+            itemText={itemText}
+            type="ul"
+            marker={marker}
+            leadingWhitespace={leadingWhitespace}
+          />,
+        );
+      } else if (olMatch) {
+        const leadingWhitespace = olMatch[1];
+        const marker = olMatch[2];
+        const itemText = olMatch[3];
+        addBlock(
+          <RenderListItem
+            key={key}
+            itemText={itemText}
+            type="ol"
+            marker={marker}
+            leadingWhitespace={leadingWhitespace}
+          />,
+        );
+      } else {
+        if (line.trim().length === 0 && !inCodeBlock) {
+          if (!lastLineEmpty) {
+            blocks.push(
+              <Box key={`spacer-${index}`} height={EMPTY_LINE_HEIGHT} />,
+            );
+            lastLineEmpty = true;
+          }
+        } else {
+          addBlock(
+            <Box key={key}>
+              <Text wrap="wrap" color={responseColor}>
+                <RenderInline text={line} defaultColor={responseColor} />
+              </Text>
+            </Box>,
+          );
+        }
+      }
+    });
 
     if (inCodeBlock) {
-      const fenceMatch = line.match(codeFenceRegex);
-      if (
-        fenceMatch &&
-        fenceMatch[1].startsWith(codeBlockFence[0]) &&
-        fenceMatch[1].length >= codeBlockFence.length
-      ) {
-        addContentBlock(
-          <RenderCodeBlock
-            key={key}
-            content={codeBlockContent}
-            lang={codeBlockLang}
-            isPending={isPending}
-            availableTerminalHeight={
-              isAlternateBuffer ? undefined : availableTerminalHeight
-            }
-            terminalWidth={terminalWidth}
-          />,
-        );
-        inCodeBlock = false;
-        codeBlockContent = [];
-        codeBlockLang = null;
-        codeBlockFence = '';
-      } else {
-        codeBlockContent.push(line);
-      }
-      return;
-    }
-
-    const codeFenceMatch = line.match(codeFenceRegex);
-    const headerMatch = line.match(headerRegex);
-    const ulMatch = line.match(ulItemRegex);
-    const olMatch = line.match(olItemRegex);
-    const hrMatch = line.match(hrRegex);
-    const tableRowMatch = line.match(tableRowRegex);
-    const tableSeparatorMatch = line.match(tableSeparatorRegex);
-
-    if (codeFenceMatch) {
-      inCodeBlock = true;
-      codeBlockFence = codeFenceMatch[1];
-      codeBlockLang = codeFenceMatch[2] || null;
-    } else if (tableRowMatch && !inTable) {
-      // Potential table start - check if next line is separator
-      if (
-        index + 1 < lines.length &&
-        lines[index + 1].match(tableSeparatorRegex)
-      ) {
-        inTable = true;
-        tableHeaders = tableRowMatch[1].split('|').map((cell) => cell.trim());
-        tableRows = [];
-      } else {
-        // Not a table, treat as regular text
-        addContentBlock(
-          <Box key={key}>
-            <Text wrap="wrap" color={responseColor}>
-              <RenderInline text={line} defaultColor={responseColor} />
-            </Text>
-          </Box>,
-        );
-      }
-    } else if (inTable && tableSeparatorMatch) {
-      // Skip separator line - already handled
-    } else if (inTable && tableRowMatch) {
-      // Add table row
-      const cells = tableRowMatch[1].split('|').map((cell) => cell.trim());
-      // Ensure row has same column count as headers
-      while (cells.length < tableHeaders.length) {
-        cells.push('');
-      }
-      if (cells.length > tableHeaders.length) {
-        cells.length = tableHeaders.length;
-      }
-      tableRows.push(cells);
-    } else if (inTable && !tableRowMatch) {
-      // End of table
-      if (tableHeaders.length > 0 && tableRows.length > 0) {
-        addContentBlock(
-          <RenderTable
-            key={`table-${contentBlocks.length}`}
-            headers={tableHeaders}
-            rows={tableRows}
-            terminalWidth={terminalWidth}
-          />,
-        );
-      }
-      inTable = false;
-      tableRows = [];
-      tableHeaders = [];
-
-      // Process current line as normal
-      if (line.trim().length > 0) {
-        addContentBlock(
-          <Box key={key}>
-            <Text wrap="wrap" color={responseColor}>
-              <RenderInline text={line} defaultColor={responseColor} />
-            </Text>
-          </Box>,
-        );
-      }
-    } else if (hrMatch) {
-      addContentBlock(
-        <Box key={key}>
-          <Text dimColor>---</Text>
-        </Box>,
-      );
-    } else if (headerMatch) {
-      const level = headerMatch[1].length;
-      const headerText = headerMatch[2];
-      let headerNode: React.ReactNode = null;
-      switch (level) {
-        case 1:
-          headerNode = (
-            <Text bold color={theme.text.link}>
-              <RenderInline text={headerText} defaultColor={theme.text.link} />
-            </Text>
-          );
-          break;
-        case 2:
-          headerNode = (
-            <Text bold color={theme.text.link}>
-              <RenderInline text={headerText} defaultColor={theme.text.link} />
-            </Text>
-          );
-          break;
-        case 3:
-          headerNode = (
-            <Text bold color={responseColor}>
-              <RenderInline text={headerText} defaultColor={responseColor} />
-            </Text>
-          );
-          break;
-        case 4:
-          headerNode = (
-            <Text italic color={theme.text.secondary}>
-              <RenderInline
-                text={headerText}
-                defaultColor={theme.text.secondary}
-              />
-            </Text>
-          );
-          break;
-        default:
-          headerNode = (
-            <Text color={responseColor}>
-              <RenderInline text={headerText} defaultColor={responseColor} />
-            </Text>
-          );
-          break;
-      }
-      if (headerNode) addContentBlock(<Box key={key}>{headerNode}</Box>);
-    } else if (ulMatch) {
-      const leadingWhitespace = ulMatch[1];
-      const marker = ulMatch[2];
-      const itemText = ulMatch[3];
-      addContentBlock(
-        <RenderListItem
-          key={key}
-          itemText={itemText}
-          type="ul"
-          marker={marker}
-          leadingWhitespace={leadingWhitespace}
+      addBlock(
+        <RenderCodeBlock
+          key="line-eof"
+          content={codeBlockContent}
+          lang={codeBlockLang}
+          isPending={isPending}
+          availableTerminalHeight={
+            isAlternateBuffer ? undefined : availableTerminalHeight
+          }
+          terminalWidth={terminalWidth}
         />,
       );
-    } else if (olMatch) {
-      const leadingWhitespace = olMatch[1];
-      const marker = olMatch[2];
-      const itemText = olMatch[3];
-      addContentBlock(
-        <RenderListItem
-          key={key}
-          itemText={itemText}
-          type="ol"
-          marker={marker}
-          leadingWhitespace={leadingWhitespace}
+    }
+
+    if (inTable && tableHeaders.length > 0 && tableRows.length > 0) {
+      addBlock(
+        <RenderTable
+          key={`table-${blocks.length}`}
+          headers={tableHeaders}
+          rows={tableRows}
+          terminalWidth={terminalWidth}
         />,
       );
-    } else {
-      if (line.trim().length === 0 && !inCodeBlock) {
-        if (!lastLineEmpty) {
-          contentBlocks.push(
-            <Box key={`spacer-${index}`} height={EMPTY_LINE_HEIGHT} />,
-          );
-          lastLineEmpty = true;
-        }
-      } else {
-        addContentBlock(
-          <Box key={key}>
-            <Text wrap="wrap" color={responseColor}>
-              <RenderInline text={line} defaultColor={responseColor} />
-            </Text>
-          </Box>,
-        );
-      }
     }
-  });
 
-  if (inCodeBlock) {
-    addContentBlock(
-      <RenderCodeBlock
-        key="line-eof"
-        content={codeBlockContent}
-        lang={codeBlockLang}
-        isPending={isPending}
-        availableTerminalHeight={
-          isAlternateBuffer ? undefined : availableTerminalHeight
-        }
-        terminalWidth={terminalWidth}
-      />,
-    );
-  }
+    return blocks;
+  }, [
+    text,
+    isPending,
+    availableTerminalHeight,
+    terminalWidth,
+    renderMarkdown,
+    settings,
+    isAlternateBuffer,
+    responseColor,
+  ]);
 
-  // Handle table at end of content
-  if (inTable && tableHeaders.length > 0 && tableRows.length > 0) {
-    addContentBlock(
-      <RenderTable
-        key={`table-${contentBlocks.length}`}
-        headers={tableHeaders}
-        rows={tableRows}
-        terminalWidth={terminalWidth}
-      />,
-    );
-  }
+  if (!text) return <></>;
 
   return <>{contentBlocks}</>;
 };
 
-// Helper functions (adapted from static methods of MarkdownRenderer)
+// Helper components
 
 interface RenderCodeBlockProps {
   content: string[];
@@ -333,11 +343,9 @@ const RenderCodeBlockInternal: React.FC<RenderCodeBlockProps> = ({
 }) => {
   const settings = useSettings();
   const isAlternateBuffer = useAlternateBuffer();
-  const MIN_LINES_FOR_MESSAGE = 1; // Minimum lines to show before the "generating more" message
-  const RESERVED_LINES = 2; // Lines reserved for the message itself and potential padding
+  const MIN_LINES_FOR_MESSAGE = 1;
+  const RESERVED_LINES = 2;
 
-  // When not in alternate buffer mode we need to be careful that we don't
-  // trigger flicker when the pending code is too long to fit in the terminal
   if (
     !isAlternateBuffer &&
     isPending &&
@@ -350,7 +358,6 @@ const RenderCodeBlockInternal: React.FC<RenderCodeBlockProps> = ({
 
     if (content.length > MAX_CODE_LINES_WHEN_PENDING) {
       if (MAX_CODE_LINES_WHEN_PENDING < MIN_LINES_FOR_MESSAGE) {
-        // Not enough space to even show the message meaningfully
         return (
           <Box paddingLeft={CODE_BLOCK_PREFIX_PADDING}>
             <Text color={theme.text.secondary}>
@@ -414,7 +421,6 @@ const RenderListItemInternal: React.FC<RenderListItemProps> = ({
 }) => {
   const prefix = type === 'ol' ? `${marker}. ` : `${marker} `;
   const prefixWidth = prefix.length;
-  // Account for leading whitespace (indentation level) plus the standard prefix padding
   const indentation = leadingWhitespace.length;
   const listResponseColor = theme.text.response ?? theme.text.primary;