Tafsir of Ash-Shu`ara' 26:8

(And indeed, your Lord is the Exalted in Might)—that is, the Victor over everything He wills of matters, among which is taking retribution upon these disbelievers—(the Merciful)—that is, the One who is extreme in mercy, and for that reason, He grants them respite and does not seize them suddenly for the enormities they have committed, which necessitate various kinds of punishments.

Or, it means: the Exalted in Might in His retribution against those who disbelieved, the Merciful to those who repented and believed. Or, the Exalted in Might in His retribution against the disbelievers, the Merciful to you by ordaining that others believe in you if these do not.

The mention of the attribute of Lordship coupled with the attribution to his pronoun—may Allah bless him and grant him peace—is among the things that manifest his honor, may peace and blessings be upon him, and contains a hidden promise to him, may Allah Most High bless him and grant him peace, that is not hidden.

The Exalted in Might is placed first because what precedes it is more manifest in demonstrating power, or because it is more indicative of repelling harms, which is more important than attracting benefits.