Have you heard the phrase "a hostage to fortune"? It's when you say something that's only too certain to come back and bite you later on. Your fortune is how well things are going for you - and that Romeo sees himself as fortune's "fool" (Fortune, of course, is personified in his line) tells us that he thinks fortune is laughing at him.
Why might fortune laugh at him? Well, he says the line just as he is realising that he has murdered Tybalt: "the citizens are up and Tybalt slain", Benvolio tells him, urgently. He has killed someone.
And, of course, he will be realising that he has not only murdered someone, but his wife's cousin. He'll have realised too that his and Juliet's plan to heal the rift between the Capulet and Montague households (the reason, you'll remember, that Friar Laurence agrees to perform the marriage ceremony) has just collapsed: he (a Montague) has just murdered a Capulet.
And, he'll be realising that his sentence (probably death, but - as it turns out - banishment) will mean that he will have to live in exile miles from Juliet.
There is a Jewish saying "when men plan, the gods laugh". In short, Romeo calls himself "fortune's fool" because he has just done something that immutably changes the course of his life, and ruins all his plans. And that is exactly what makes fortune laugh. And what does a king laugh at? His fool.
This quote is also discussed in our free Shakespeare quotes section. Please see the link below for more information.