"Therefore, the Lord himself will give you a sign. Behold, the virgin shall conceive a and bear a son, and shall call his name Immanuel." Isaiah 7:14
Preaching from prophecy is a tricky thing. We are often tempted to look at the passages quoted in the New Testament as being fulfilled in Christ as if they had no immediate context. However, while the prophets did predict the future with the aid of the Holy Spirit, and while they did write out of a conviction that was tied to a messianic hope, they were nonetheless writing to those who lived in their own day as well. This makes the task of interpreting the prophets difficult.
Take, for instance, the prophecy of a virgin birth from Isaiah 7:14. This is particularly difficult. While Matthew clearly identifies this as being fulfilled in Christ, it is hard to see this from the passage itself. There are a few objections that the majority of scholars point out. First, the Hebrew term which our Bible's translate as "virgin" in this verse is more accurately rendered "a young woman of marriageable age." While the Greek Septuagint translates the word specifically as virgin, the Hebrew does not require it. So, to be precise, the prophecy did not require a virgin birth in the sense that we understand that it is fulfilled in Jesus. Second, the immediate context of the verse suggests that Isaiah is talking about a sign that will happen in his immediate context. It appears that the sign is to be given for king Ahaz of Judah as a sign that God would protect them from the imminent danger of an attack from Syria and Israel, the Northern Kingdom. Isaiah says to Ahaz that the two kings he fears will no longer be a threat by the time the child is old enough to tell right from wrong. Finally, chapter 8, within the immediate context of Isaiah, we see that there is a child born who is intended to be a sign. Isaiah has a son named Maher-shalal-ash-baz of which it is said, "before the boy knows how to cry 'My father' or 'My mother,' the wealth of Damascus and the spoil of Samaria will be carried away before the king of Assyria." It seems as though Isiah's prophecy was fulfilled by the birth of his own son. Isaiah even says in 8:18 that his two children were given to him as signs from Yahweh for Israel.
So how do we understand this in the light of what Matthew said? I believe he understood Isaiah 7 in the light of Isaiah 9. In Isaiah 9, we see another promise of a child to be born (9:6-7). In this promise it says that the child will be called "Mighty God" among other magnificent names. It also says that this child will sit on David's throne forever. In chapter 9, Isaiah is looking back to 2 Samuel 7:12-13. The LORD promised David, "When your days are fulfilled and you lie down with your fathers, I will raise up your offspring [seed] after you, who shall come from your body, and I will establish his kingdom. He shall build a house for my name, and I will establish the throne of his kingdom forever." This promised seed who would sit on David's throne forever is none other than the blessing that would come to all nations through Abraham. This son was also none other than the seed of the woman promised in Genesis 3:15. I suspect, that in Matthew's mind the Isaiah 7:14 was connected with 9:6-7 and that these were pointing to something that would find their ultimate fulfillment in someone much greater than the immediate context suggested--they were fulfilled in Christ. Jesus was born of a virgin, he was God with us, and he was David's son who would sit on his throne forever.
"For unto us a child is born, to us a son is given; and the government shall be upon his shoulder, and his name shall be called Wonderful Counselor, Mighty God, Everlasting Father, Prince of Peace. Of the increase of his government and of peace there will be no end, and on the throne of David and over his kingdom, to establish justice and with righteousness from this time forth and forevermore. The zeal of the LORD of hosts will do this." Isaiah 9:6-7