To highlight both cancelled and disputed orders in red, add an OR statement at the beginning of your Test line, enclose the conditions in parenthesis, and separate them with semicolons.
OR([STATUS]="Cancelled";[STATUS]="Disputed")
Your report output should now be formatted according to the specified conditions.
This is the resultant formula, following the above example for one condition and red and green colors:
Simple conditional formatting
=IF([STATUS]="Cancelled";"#FF0000";"#00CC00")
This is the resultant formula, following the above example for two conditions and red and green colors:
Multiple conditions
=IF(OR([STATUS]="Cancelled";[STATUS]="Disputed");"#FF0000";"#00CC00")