Surtr's sword is the mighty, flaming sword wielded by the Ruler of Muspelheim and the Progenitor of the Fire Giants Surtr.
Background
Surtr forged his mighty flaming sword for one purpose alone: To burn down Asgard when Ragnarok begins. He continues to sharpen the fiery blade and trains with it in order to prepare himself for Ragnarok.
The Sword of Surtr remains in Muspelheim and when Kratos and Atreus arrives there, the Sword reaches out to Atreus to come train. Upon finally defeating the Valkyrie Gondul, the Sword, impressed, decides to give them harder challenges.
Powers and Abilities
Surtr's sword is quite possibly the most powerful weapon in Norse Mythology. It is so powerful that Mimir describes it as a weapon of legend and it is capable of destroying Asgard with a single tremendous blow upon Surtr falling to the grounds of Asgard after being defeated by Thor and Odin.
Surtr's sword is capable of telepathically calling out to others of supernatural senses, as shown with Atreus and it is able to create highly difficult challenges to train him and Kratos.