Seems this question is so common with Wordpress and Nginx and I think cuz so many tutorials online are assuming that you use Apache in backend of your Nginx…

Anyway just simple fix for permalinks is usually the try_files code:

location / {
try_files $uri $uri/ /index.php?$args;
}

See the full Nginx server block examples

https://github.com/littlebizzy/slickstack/blob/master/nginx/default-single-site.txt