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The pentagon cancels a 10 billion dollar contract which sends major U.S Indices down in the red for the start of the week

The Pentagon Cancels a $10 Billion Contract, FTSE 100 Drops & Didi Shares Fall 22%

U.S. indices falls as Pentagon cancels $10 billion contract

Indices in the United States reopened in the red after the long holiday weekend, as news broke that the Pentagon was cancelling a proposed $10 billion cloud contract.  

The contract was initially won by Microsoft in 2019, after a heavily contested battle with Amazon, which led to a legal battle involving the tech giants.

Amazon had believed that it lost the battle due to President Trump’s administration’s hostilities towards former Amazon CEO, Jeff Bezos.

In a statement regarding the Joint Enterprise Defense Infrastructure deal, the Department of Defense stated that, “due to evolving requirements, increased cloud conservancy, and industry advances, the JEDI Cloud contract no longer meets its needs”.

Both the Dow Jones and S&P 500 retreated from recent highs.

FTSE 100 drops by most in 3-weeks

The FTSE 100 in the United Kingdom dropped by its most in the last 3-weeks in today’s trading session.

Declines in the London based index came as shares in oil producers Royal Dutch Shell and British Petroleum dropped on Tuesday.

Shares in the oil giants dropped as it was confirmed that this month’s OPEC+ meeting was formally cancelled, resulting in oil prices falling from recent highs.

Brent crude dropped by as much as $3 in today’s session, falling to an intraday low of $76.40.

This resulted in BP dropping by 3.78%, with RDS falling by 1.23%, the FTSE 100 closed 0.89% lower.

Didi shares tank as Chinese crackdown continues

Less than a week removed from its Initial Public Offering, shares in China’s leading ride hailing company continued to fall amidst government crackdowns.

The company which is now listed on the New York Stock Exchange fell by as much as 22% on Tuesday, as traders reacted to news that the company would not be able to register new users.

News of this came out after Friday’s close, and with the long weekend, today was the first opportunity for traders to react to the reports.

The Chinese government is currently reviewing the company for potential cyber security breaches and have restricted usage on the app till the investigation is completed.

However, many believe that the investigation could soon be completed, resulting in a potential rally.

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