Problems with a decoupled frontend and php backend in docker-compose - api

Question

I've been struggling on a problem with a docker-compose environment where a Single Page Application should talk to a PHP api. Preferrably laravel.
My approach is to have nginx act as a reverve proxy for both.
However, every time i try to hit the /api route, it says file not found. the php-fpm do recieve the request, but it apparantly fails to load the index, even tough it is in the specified folder.
My docker-compose.yml looks like this.
version: "3.1"
services:
redis:
image: redis:alpine
container_name: apitest-redis
postgres:
image: postgres:9.6-alpine
container_name: apitest-postgres
working_dir: /application/api
volumes:
- ./api:/application/api
environment:
- POSTGRES_USER=myapiuser
- POSTGRES_PASSWORD=2cr34m1ng#n4k3d
- POSTGRES_DB=test
webserver:
image: nginx:alpine
container_name: apitest-webserver
working_dir: /application
volumes:
- ./client/dist:/application/dist
- ./api:/application/api
- ./docker/nginx/nginx.conf:/etc/nginx/conf.d/default.conf
ports:
- "8080:80"
php-fpm:
build: docker/php-fpm
container_name: apitest-php-fpm
working_dir: /application/api
volumes:
- ./api:/application/api
- ./docker/php-fpm/php-ini-overrides.ini:/etc/php/7.2/fpm/conf.d/99-overrides.ini
And my nginx.conf looks like this:
server {
listen 80 default;
client_max_body_size 108M;
access_log /var/log/nginx/application.access.log;
root /application;
index index.html index.php;
location / {
root /application/dist;
try_files $uri /index.html;
}
location /api {
root /application/api/public;
try_files $uri /index.php?$query_string;
}
location ~ \.php$ {
fastcgi_pass apitest-php-fpm:9000;
fastcgi_index index.php;
fastcgi_param SCRIPT_FILENAME $document_root$fastcgi_script_name;
fastcgi_param PHP_VALUE "error_log=/var/log/nginx/application_php_errors.log";
fastcgi_buffers 16 16k;
fastcgi_buffer_size 32k;
include fastcgi_params;
}
}