Here is some postmill optimism;
In contrast to the nations’ futile rage, God sovereignly declares: “But I [emphatic personal pronoun in the Hebrew] have installed my King on Zion” (v. 6). God does not speak of this installed one as “a king” or “the
king,” but as “my King.” Verse 7 expands our understanding of this installation, showing the Messiah himself speaking: “I will proclaim the decree of the Lord: / He said to me, ‘You are my Son; / today I have become your Father.’” The “decree” is a pledge of adoption by God, a holy coronation rite establishing this King’s legitimacy (see: 2Sa 7:13–14; Ps 89:26–27). The word “today” suggests a formal moment at which the title applies to the new ruler.
Rather, than occurring at Christ’s second advent, as many assume, the New Testament relates it once again to the first century: at the exaltation of Christ beginning with his resurrection. “God has fulfilled this for us their children, in that he has raised up Jesus. As it is also written in the second Psalm: ‘You are My Son, today I have begotten You’” (Ac 13:33; cp. Ro 1:4). At the resurrection/ascension God installs Christ as the King (Ro 1:4), who will rule from God’s right hand (Ro 14:9–11; Eph 1:20ff; Co. 1:18; 1Pe 3:22; Rev 17:14; 19:16).
The Great Commission speaks of Christ’s being “given” all authority — apparently at his recent resurrection (Mt 28:18; cp. the aorist tense in Php 2:9).
But what of this installation “on Zion”? Zion is an historical site, to be sure; it is a Jebusite fortress David captures and renames the “City of David” (2Sa 5:6–9). With David’s bringing the Ark to Zion, the hill becomes sacred (2Sa 6:10–12).
Because of its holy significance, then, the name “Zion” gradually applies beyond the historical site to include Mount Moriah where Solomon builds the temple (Isa 8:18; Joel 3:17; Mic 4:7) — and eventually to all of Jerusalem (2Ki 19:21; Ps 48:2, 11–13; 69:35; Isa 1:8). “Zion became in Hebrew tradition the central symbol of God’s rule, the kingdom of God, a realm of justice, righteousness, and peace.” As 31 such it can even represent the whole Jewish nation (Isa 40:9; Zec 9:13).
In the New Testament Zion/Jerusalem transcends Old Testament realities, reaching to heaven itself (Gal 4:25–26; Heb 12:22; Rev 14:1).
Thus, God transfers the center of theocratic rule to heaven, where Christ presently rules over his kingdom (Jn 18:36; Rev 1:5).
Now all that the enthroned Messiah need do is “ask of me, and I will make the nations your inheritance, the ends of the earth your possession” (v 8). The Lord promises his Messiah the “nations” (not just one nation, Israel) and “the ends of the earth” (not just one region, Palestine) as his permanent ‘possession” (v 8). Though they will resist him (vv 2:1–3), he will break them in his dominion (v 9).