This psalm is a clear explanation and prophecy of Jesus Christ. This psalm is also quoted by Jesus in Luke 20:43 where Jesus points out that the Christ is the Son of David but also David exalts the Christ by calling him Lord. Peter does the same in Acts 2:35. And so the psalm has incredible significance and insight to Jesus and his ministry on earth and in heaven.
In the first verse, the Lord which is Yahweh says to “my Lord” which is Adonai which means Lord or master or king. This is the enthronement of Jesus the Messiah who is to rule in the Davidic line. The messianic rule and announcement of his kingship is placed importantly as the king is placed at the right hand of God which is the place of favor and authority.
God will triumph upon the enemies of God — making them so submitted and conquered as a footstool. Yahweh sends forth the royal scepter which is the symbol of authority and royal rule upon the messiah. The messiah will be worshipped and praised by everyone. Jesus is also the priest in the order of Melchizedek (Genesis 14) so instead of being the priest from Levi, Jesus is the priest of God. Jesus is the special high priest that offers the sacrifice, which is himself, once for all, and that sacrifice is sufficient for the sins of mankind. Jesus will strike the kings and his royal and priestly authority is everlasting, and his rule and reign is forever. He is the righteous judge and his reign is so powerful.
This psalm looks to Jesus as the perfect priest and king, the one who offers forgiveness and defeating the enemies of God with perfect and pure justice. This is a psalm about the greatness of God and his mighty power. What a comfort that we have of the rule of King Jesus!