Where does the bug appear (feature/product)?
Cursor IDE
Describe the Bug
Agent chat “No resources found - No MCP resources available” when instructing agent to use mcp server. I have tried using different mcps (local and remote) and all throw the same error, it was working just fine few days back.
Steps to Reproduce
Add context7 mcp to mcp.json
{
"mcpServers": {
"context7": {
"command": "npx",
"args": ["-y", "@upstash/context7-mcp", "--api-key", "<api-key>"]
}
}
}
instruct agent to use context7 mcp tool, fetch documentation and implement code.
The agent throws “No MCP resources available” box and goes on to use internet search.
Context7 package is latest, I have tried using remote mcp url too which leads to same result. Other mcp tools like which interact with local software also give same error, none of the mcps are working for me.
Expected Behavior
Agent should be able to list and use tools offered by the mcp.
Screenshots / Screen Recordings
Operating System
MacOS
Current Cursor Version (Menu → About Cursor → Copy)
Version: 2.3.41
VSCode Version: 1.105.1
Commit: 2ca326e0d1ce10956aea33d54c0e2d8c13c58a30
Date: 2026-01-16T19:14:00.150Z
Electron: 37.7.0
Chromium: 138.0.7204.251
Node.js: 22.20.0
V8: 13.8.258.32-electron.0
OS: Darwin x64 25.1.0
For AI issues: which model did you use?
Opus 4.5, Sonnet 4.5, Auto
Additional Information
Output Log for MCP: user-context7
2026-01-17 18:36:37.928 [info] Handling CreateClient action
2026-01-17 18:36:37.944 [info] Starting new stdio process with command: npx -y @upstash/context7-mcp --api-key <api-key>
2026-01-17 18:36:39.751 [error] WARNING: Using default CLIENT_IP_ENCRYPTION_KEY.
2026-01-17 18:36:39.849 [error] Context7 Documentation MCP Server v2.1.0 running on stdio
2026-01-17 18:36:39.855 [info] Successfully connected to stdio server
2026-01-17 18:36:39.856 [info] Storing stdio client user-context7
2026-01-17 18:36:39.856 [info] CreateClient completed, server stored: true
2026-01-17 18:36:39.866 [info] Handling ListOfferings action, server stored: true
2026-01-17 18:36:39.866 [info] Connected to stdio server, fetching offerings
2026-01-17 18:36:39.869 [info] listOfferings: Found 2 tools
2026-01-17 18:36:39.869 [info] Found 2 tools, 0 prompts, and 0 resources
Does this stop you from using Cursor
Yes - Cursor is usable but I need to use mcp tools
Edit: opened a new chat windows asked agent to list all the mcp tools it has access to and then asked it to use them and it worked, but the no mcp resource available error comes up too often to just open a new chat tab wasting a request to list tools

